We all know the importance of a strong credit history but many haven't the foggiest idea of how to work their credit to make it look as good as possible.
Particularly when shopping for a home your credit will be evaluated primarily based upon the credit scores. These credit scores are generated when credit reporting agencies access your credit history.
Were all aware of this, but few of us really know how these scores are generated. Most think the scores are just about payment history.
This is only partially true. Your credit score is generated from numerous factors in combination. Thereafter, no one knows except the developer and those in the real know.
Here is what we do know. You obviously need to keep a clean payment history. Remember, companies report you late only when you've exceeded thirty days past your due date.
Keep low balances relative to your available credit. If you keep a five dollar balance and you have $1,000 limit is better than a $5 balance and a $10 credit limit.
You definitely don't want to be maxing your cards out. That is bad juju, even if you pay them on time.
If you don't have much credit it's a good idea to get some by opening up several credit cards. Open trade lines with good payment histories is positive.
Be careful about being too aggressive getting cards. You don't want to all of the sudden get 20 of them. The system could perceive that as an attempt to run up credit.
Make very moderate purchases with your small number of cards and be sure to pay the entire balance off by the end of the month. In a year you won't believe your scores.
As far as credit bumps, bruises and scrapes, the more time they exist in your past the better your scores. If even considering looking for a home be extremely careful. Just one recent 30 day late can kill scores.
Most of credit scoring makes sense. Use logic when developing your credit picture and you'll be just fine. - 15224
Particularly when shopping for a home your credit will be evaluated primarily based upon the credit scores. These credit scores are generated when credit reporting agencies access your credit history.
Were all aware of this, but few of us really know how these scores are generated. Most think the scores are just about payment history.
This is only partially true. Your credit score is generated from numerous factors in combination. Thereafter, no one knows except the developer and those in the real know.
Here is what we do know. You obviously need to keep a clean payment history. Remember, companies report you late only when you've exceeded thirty days past your due date.
Keep low balances relative to your available credit. If you keep a five dollar balance and you have $1,000 limit is better than a $5 balance and a $10 credit limit.
You definitely don't want to be maxing your cards out. That is bad juju, even if you pay them on time.
If you don't have much credit it's a good idea to get some by opening up several credit cards. Open trade lines with good payment histories is positive.
Be careful about being too aggressive getting cards. You don't want to all of the sudden get 20 of them. The system could perceive that as an attempt to run up credit.
Make very moderate purchases with your small number of cards and be sure to pay the entire balance off by the end of the month. In a year you won't believe your scores.
As far as credit bumps, bruises and scrapes, the more time they exist in your past the better your scores. If even considering looking for a home be extremely careful. Just one recent 30 day late can kill scores.
Most of credit scoring makes sense. Use logic when developing your credit picture and you'll be just fine. - 15224
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