I recently took a free credit class over the weekend and here are some things I’d love to share with you .When attempting to raise your credit score the first thing you need to know is What is Credit and How is it calculated ?
A credit score is a statistical number that evaluates a consumer’s creditworthiness and is based on credit history of the consumer .
There are 5 components of a credit score .
10% Type of credit
15% Length of Credit History
30% Debt-to-Income Ratio
35% Payment History
Since the highest component on how your score is calculated is payment history I think it is safe to say it is important for you to pay your creditors ON TIME .
Next it is important to keep ALL OF your credit card balances under 30% utilization.
In my opinion these are the two most important steps when trying to raise your credit score. Practice paying your creditors on time and bring down your utilization to 30% or below .
- An easy way to ensure you are paying on time is AUTOMATION . Open an additional checking account that is NOT linked to your debit card. In doing this this will ensure that your creditors are paid on time with out any additional effort.
- Cant stop using your credit cards ? Cut them up . No I did not say cancel them , just cut them up . While paying down your debt it is important not to use those credit cards and mess up all of your hard work to pay off your credit cards
Be kind to yourself , forgive yourself for the mistakes you’ve made in the past and look forward to having good credit in the future .
” The secret to getting ahead is getting started. ”
Until next time ,
XoXo Just Sittin Pretty