35% of your score is made up of Payment History - that means keep your positive accounts in good standing and if any accounts have late payments or are in collections, call LexingtonLaw or a credit repair company that can help. They work to remove negative items. Paying them off doesn’t raise the score and the items stay for up to 7yrs whether you pay them or not. Removing them can help better the score.
30% is made up of your Credit Utilization - or the amount you carry on your CCs. Keep the balance as low as possible. The only reason people say to keep a balance is to keep the CC from closing the account but this can only happen if you never use your card. So use your card often, but pay it in full before the due date to prevent paying interest.
15% is made up of Credit Age - or how long you’ve had accounts open. CCs are usually great for this because they never close (as long as you don’t close it yourself or the company doesn’t close it). Loans will eventually end and acune your age is an average of all of your accounts, closing or paying off loans can lower that average. So never close accounts and avoid small loans that get paid off quickly.
10% is your Credit Mix - this is the types of accounts you have. The more diverse your credit it, the better the impression the lender gets because it shows you can handle different types of accounts, car loan, home loan, CC, and maybe a personal loan. That’s all you need.
10% is New Credit or Inquires - simply put, don’t apply for anything unless it’s necessary. More than 4 inquiries in a 2yr timespan makes you look like a high risk.
I’m a credit consultant with LexingtonLaw by the way, for the past 6yrs. Hope the information helps!
