Shop my brand for virgin human hair & mink eyelashes at www.poshbombshell.com Hey Wassup! I recently learned about the things that are affecting your credit score that you don't even know about. With the new year, we have to start learning about personal finance and get our credit right. Let me help you have good credit!
Here’s what makes up 100% of your credit score:
#1. ON-TIME PAYMENT HISTORY - 35%
This is very simple, hard to do, but not impossible! DO NOT T MISS A CREDIT CARD PAYMENT AND DON’T PAY IT OFF LATE! For you to have a good credit score, you have to at least pay the minimum credit card payments that are due, and pretty much NEVER miss a payment! One late payment could completely ruin your score.
#2. CREDIT UTILIZATION - 30%
In order for you to get a PERFECT score, you have to show the credit bureaus that you are NOT maxing out all of your credit cards! The credit bureaus want to see that you’re keeping a fairly LOW balance compared to all of the credit you have available to you to use.
#3. LENGTH OF CREDIT HISTORY - 15%
The longer you’ve had credit for - the BETTER. But remember, it's very important to be RESPONSIBLE! If you get a credit card early, even as young as 18, this can really help your credit history, but you have to educate yourself on how to use your card responsibly. I got my first credit card at 19, and I didn't know what I was doing lol, I limited myself to only one card until I could figure out the correct way of how to use credit cards to build credit. Having credit early will help build the foundation of your entire credit history.
Keep in mind that the credit history is calculated as the AVERAGE length of your credit history… not the TOTAL length. I recommend that you first, start building your credit as soon as you possibly can and keep those accounts open and in good standing for as long as possible. This will help you build up a goof longstanding credit history. Because when it's time for you to apply for new lines of credit, it won’t reduce your average account age as much, plus, it’ll have less of an impact on your score.
#4. TOTAL NUMBER OF CREDIT LINES - 10%
Keep in mind that the more credit lines you have, the higher your credit limit will be and that lowers your overall utilization, which ultimately helps you have a perfect credit score (hope that makes sense lol)
By having MORE credit available to you, you’re able to show even MORE on-time payments - which, again, will help increase your score. But you have to make the payments ON TIME!
Last but not least, having a mix of credit types - like an auto loan, a mortgage, in addition to your credit cards, shows lenders that you can handle different types of loans without defaulting on them.
#5. NUMBER OF CREDIT INQUIRIES - 10%
Every time you apply for new credit, that gets reported to the credit bureaus, and it shows up on your report as a “hard inquiry.” This allows lenders to keep track of how many times you’re going and asking for credit. The people who are loaning you money thinks you look "risky" if you are applying for too much credit suddenly.
Plus, whenever you get new credit cards - that LOWERS your average credit length - which could further drop your score, as well. But if you know these things, you'll know how to stay on top of your credit score so that you can increase it!
I think it's very important for you to check your credit score every few weeks using a free service like CreditKarma or CreditSesame. They need to sponsor me for this free promo lol.
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