Archive for July, 2009
Credit Score – What Affects It?
There are a number of factors that affect your credit report.
Payment History: Your payment history is the most important factor of your credit report. Almost 35% of your score depends on the payment history. You need to make sure that you make your payments on time and pay the premiums and insurances regularly else it might affect your credit score to the maximum. Make sure that you don’t close your old accounts, simply because old accounts make your credit history lengthy and a good credit history is always a positive. Closing old accounts also reduce your overall credit limit.
Debts: The amount you’ve borrowed compared to your available credit forms a major part of your credit report. This factor contributes to around 30% of your credit score. It’s calculated on an overall basis and an individual account basis. Experts recommend that you don’t borrow more than 35% of your available balances. Thus you shouldn’t try to shed off any extra credit cards that you may possess
Type of debt: Around 10% of your credit score also depends on the type of credit. Installment debt like an auto loan is viewed more favorably as compared to revolving (credit card) debt. The changes made in 2009 offers you points to manage various kinds of debts (mortgage, auto loan, credit cards) successfully.
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