How to Improve Your Credit Score
Financial Behaviors That Influence Your Credit
Your credit score! It can range between 300 and 850. Your credit is considered excellent when your credit score is 750 or above.
You influence your credit score with your positive — or negative — financial behavior. There are five factors:
- Paying all bills on time. It’s best to pay credit card balances in full every month. But if that’s not possible, make the minimum payment before the due date. You’ll avoid paying finance charges and late fees, and build your good credit at the same time.
- Keeping your debt-to-credit-limit ratio low. The lower your outstanding debt is to the total amount of all your available credit, the better. Don’t borrow up to the max on your available credit. Pay down your total debt.
- Having a long credit history. The longer time you have used credit, the better your score will be. Keep older credit card accounts open, even if you only use them once a year. The exception is if you can avoid an annual fee by closing the card.
- Keeping applications for new credit to a minimum. New applications for credit lower your score.
- Having a mix of credit helps. A good mix of credit cards, retail store cards, and installment loans is the key. Avoid having debt in just one category.
A free tool to monitor your credit score and learn about using credit wisely is www.creditkarma.com. The site includes calculators and tutorials to help make you more credit savvy.