Factors That Affect Your Credit Score

Open or Active Accounts:

It is important to remember that on-time monthly payments with your creditors are ideal. Your credit score will increase, while your debt versus your income ratio decreases.  Not only is a positive payment history important, but a balance on revolving accounts is important too.  A revolving account is an account that charges you interest on a month-to-month basis.  This is usually a credit card.  

Here are important factors to remember:

A Revolving Account is an account that charges you interest on a month-to-month basis.  Keep the balances below fifty percent of the high credit limit.  For example, if the high credit limit is $1,000.00 dollars then your balance should be below $500.00 dollars.  A balance over fifty percent of the limit will start to decrease your credit score monthly.  Credit is there to help you not hurt you.  Only accept credit offers for one main purpose to increase your credit score for more lending opportunities. 

A good mixture of credit is having a Mortgage, Installment loan (auto or personal loan), and a credit card.  If you are starting to establish credit and have never had any credit cards in the past than having one or two accounts with a low annual percentage rate is ideal.  This will help establish credit; which will bring in more offers.

Be aware that the only reason why you would accept a credit offer is to have a “good mixture” of credit, not to borrow money in order to pay off your daily debts or expenses.  This is where many consumers start to go over their budget, and become overwhelmed with debt.  

If you are in a situation where you have more than two credit cards and have not only maxed out this cards, but stopped or never made payments then be aware that these accounts will be sold to a third party collection agency.  If you do not contact the creditor within the first few months you might loose your chance in enrolling in a hardship program.  

If you do not contact the creditor then they will see your information and write it off as a “Charge Off”.  My suggestion is to contact the original creditor before it’s sold.  

Always educate yourself first before attempting any of these suggestions. The Credit Repair Center was written by Wanda Acevedo. For more information please contact Wanda at: (704)-877-8739.