Tips for Improving Bad Credit

If you have bad credit and would like to see an increase in your credit score, then be sure to pay close attention to the following:

1. Your Payment History which calculates 35% of your total score, is determined on you paying your bills every month on time. Tip: Avoid late fees by putting bills on auto pay.

2. Length of Bill Payment which calculates 15% of your total score, is determined on how long you have had credit in your name. Tip: Do not cancel credit cards, especially your older ones because they play a huge role in the “age” of your credit.

3. Amounts Owed which calculates 30% of your total score, is determined by how much debt you are utilizing compared to the limits your creditor is loaning you. Tip: Resist utilizing more than 30% of your credit line, and ALWAYS avoid maxing out your credit cards.

4. New Credit Lines which calculates 10% of your total score, determines if you have had creditors do a hard inquiry on your credit report to see if you are eligible to receive a loan. Tip: Avoid creditors checking your credit unless absolutely necessary. If you are applying for big items like cars or homes, try to get as many checks done in less than two weeks to avoid a penalty in your score.

5. Types of Credit which calculates 10% of your total score, determines if you have a mix of credit such as: credit cards, mortgages, student loans, auto loans, etc. Tip: This is only 10% of your score, don’t go into debt just to diversify your credit.

There you have it! If you follow these tips, your score will take “baby steps” to victory! Once you become disciplined with operating your credit as stated above, then you will be ready to make the “giant leaps” to get your perfect score!