My Credit Score
A person’s credit score is a three-digit number that lenders use to determine their creditworthiness. It’s based on information in the credit report, including whether you pay your accounts on time and how much debt you have. The average credit score ranges from 300 to 850. The credit reporting agencies calculate the scores by using information from lenders, banks and other sources. There are a few things that you can do to hurt your credit score, including paying late, having too many open accounts and applying for too much credit.
One of the biggest factors in a Credit Repair Coral Gables is your payment history, making up 35% of the calculation. This includes the amount of money you owe on revolving accounts, like credit cards, as well as installment loans, such as mortgages and auto loans. It also factors in public records, such as bankruptcies, lawsuits and liens. Making timely payments is the best way to raise your credit scores, and you should aim to pay down balances in a reasonable time frame.
The number of new credit accounts you have and the length of your credit history account for 10% of your credit score, which is why keeping old credit cards open can help you maintain a good score. The length of your credit history is also based on the age of your oldest account, so closing old cards can shorten your credit history and hurt your score.
What Actions Can Negatively Impact My Credit Score?
Having too many open credit accounts can lower your credit scores, even if you don’t have any outstanding debt on them. This is because the credit scoring models look for an appropriate mix of revolving and installment accounts, and they consider the amount of available credit you have to lend.
The proportion of your debt to total credit limit is a big factor in credit scores, and it makes potential lenders hesitant to give you money or services if you’re overextended. The ideal is to have a credit utilization ratio of 30% or less. To achieve this, pay down credit card balances and keep them below the total credit limit.
Refinancing a loan or consolidating credit card debt with a new lender will result in a hard inquiry on your credit report, which will hurt your score temporarily until it gets settled. It’s usually better to save your hard inquiries for when you’re shopping for a mortgage, auto loan or credit card.
Unpaid parking tickets, utility bills and other fines and fees can be reported to the credit bureaus as delinquencies and hurt your score. You should always make your payments on time, no matter what the amount is. If you’re struggling to manage your credit, a credit repair agency can help. In addition to disputing inaccurate information with the credit reporting agencies, they can assist you in creating a budget and developing a plan to get you back on track.