Getting Serious About Your Credit

Marci Thomas

August 3rd, 2016 | Posted in Money Tips
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Are you serious about your credit score?

Getting to a point where you are happy with your credit score seems daunting. You probably know that there are a lot of steps and time that needs to happen before you reach a credit score that you like. But if you are serious about making those changes and following steps to improving your credit, start here.

Credit Overview

Your credit is based off of a multiple factors and you should probably know what those are.

Payment History: 35% of your credit score is calculated based on how well you pay back your creditors. It’s a major key indicator on if you will be able to pay future creditors.

Amount Owed: 30% of your credit score is calculated based on the amount of credit still owed. If you are constantly maxing out your credit card it shows that you are having a difficult time paying down the balance.

Length of Credit: 15% of your credit score is created by having a long credit history. Try not to close current accounts that you have had for a long time.

New Credit: How many accounts have your opened and how many do you have? This will be a factor and calculate 10% of your score.

Types of Credit: The last factor is about diversifying your credit. If you are able to manage multiple accounts such as auto loans, student loans and credit cards, it can be beneficial for your credit score.

Where to Start 

Start where you are. If you are serious about improving your credit score, you need to know what your credit score is today. You can get a free report and go from there! Remember that fixing your credit also takes time, so be patient!

There are also a lot of tools that can help you get your credit score up! Sign up for a free credit monitoring service like Credit Karma. This can help you stay on track for getting a better credit score.

If you don’t qualify for a credit card, start with a secured credit card. The limit to this card is typically the upfront payment you can afford. Save $200-$500 then open a secured card with this money. This will start your credit line. Try to keep your total balance under 30% of what your limit is. This will show that you can handle having access to more funds but you don’t need them.

If you have a lot of debt the answer might be in how you are budgeting. Read these posts to help you fix your budget and better pay down your debt!

If you are serious about improving your credit score remember that it will come with time and good financial habits. Work on paying down your debt, building your credit history, and keep those good habits once you do have a credit score you are happy with!

Getting serious about your credit score is important! We hope these hints help you on your way to getting a better score.