3 Secrets about Your Credit Score


Credit scores can be an overwhelming, daunting subject. Today I’m going to let you in on three big secrets about your credit score.


1. Did you know that 35% of your credit score is from your payment history? It’s so important to pay on time to keep your credit score high!


2. About 30% of your credit score is based on your capacity of credit. For example, if you have a credit limit of $5,000, you only want to use 30% of the capacity of that card.  In this case, you only want to use $1,500 of credit and keep $3,500 unused.


So here’s a tip: if you have one credit card with a $10,000 balance and another with a much lower balance, transfer some of the debt from one credit card to the other so that the capacity used is as close to 30% as possible.  


3. About 10% of your credit score is based on inquiries and past applications. You can keep this down by only applying for credit cards when you need them. Every time you shop, a cashier might ask you if you want to apply for that store’s credit card. You probably don’t need to apply for all of them.


So, this all adds up to 75% of your credit score. That means 75% of your entire credit score is based on three things: payment history, the capacity of credit used, and inquiries and past applications. Be mindful of this to keep your credit score up.


Pay your bills on time, be sure not to max out your cards, keep a 30% balance or lower and don’t get too many inquiries. By following these three steps, you can dramatically maximize your credit score. For more detailed information about how to maximize your credit so that you can save money and get better interest rates, reach out to me at any time or email me to get a detailed 17-page report.


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