How Important is Your Credit Score?
- What’s in a Score?
35% based on payment history
30% capacity (How much do you have available?)
15% for length of credit
10% for accumulation of debt in the last 12-18 months
10% for the mix of installments vs. revolving credit. - What’s Not Included
Debt ratio - What helps your score?
Pay down your credit cards! - What hurts your Score?
Missing payments – it takes 24 months to recover from a late payment - The NOW is most important – so make your current payments on time!
Credit weight for each year:
40% ~ current to 12 months
30% ~ 13-24 months
20% ~ 25-36 months
10% ~ 37+ months
Income
Length of residence
Length of employment
Do not close credit cards
Make current payments on time
Slow down on opening new accounts
Work on acquiring a solid credit history with years of experience!
Maxing out credit cards
Closing out credit cards
Opening numerous accounts
Having more revolving loans than installment loans