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Category: Money

Raising Up Your Credit Card Scores

Written on July 09, 2010 by Japhet Writ

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It's not just about the number of credit accounts that determines your score. It's also about what you do with your credits.

If you are the type of user that would like to have your score sky rocket, you have to know first the most important information used to determine your score. There are two things that account for the two-thirds of your score.

First is your payment history. Most lenders consider a long history of on-time payments on all type of credit accounts before approving you for a loan.

Second is the for each account. This is just a comparison between the the total amount of your versus the amount you owe. If you use more than 50 percent of your for each account, your credit score can go lower. Why? Because lenders will consider you as a high risk consumer that is more likely to make late payments when you are close to missing out all of your credit limits.

Now the remaining one-third of your score is affected by three factors.

  1. Length of Credit History: The score considers your oldest active accounts and the average age of all accounts. Therefore, a credit report that contains list of accounts for at least ten years will help your credit score.

  2. Recent Credit: It can be seen as a risky behavior if you open multiple accounts for a short period of time. Multiple credit reports can also lower your score.

  3. Credit Type: It is considered in your credit score the type of credits that you use including , , and .

To sum it all up, people with 800 credit scores or higher have the following:

  • Four to six credit card accounts.

  • No late payments in the past seven years.

  • At least one installment loan with good payment history.

  • An average of 10 years per account.

  • Three or less credit inquiries for the last six months.

  • No bankruptcies, foreclosures, charge-offs, or collections.

  • Not more than 35 percent of debt levels on overall credit limits per account.

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