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Personal Finances / Credit Cards and Consumer Debt


Subject:  Re: %30 credit Date:  10/23/2013  3:51 PM
Author:  Fuskie Number:  307387 of 312188


To build up your credit score...

Always pay your bills on time and pay down the total amount you owe.
(accounts for 35 percent of your score)
If you forget all else after reading this, remember this one! This is the single most important rule for having a good credit score.

Keep a low credit utilization rate.
(accounts for 30 percent of your score)
Let's say you have a credit card with a $10,000 limit. If you're carrying a balance month-to-month of $3,000, you're only using 30 percent of the total limit. But if your credit limit is suddenly dropped to $3,000, then suddenly you're using 100 percent of what's available to you. That's yet another reason to always pay down credit card debt as quickly as possible. You always want to stay at credit utilization of 30 percent or less.

When you pay off a credit card, don't close the account.
(accounts for 15 percent of your score)
Doing so only reduces your available credit and drives your score down. You want to have between four to six lines of credit. Be sure to use them twice a year -- even if it's just for a dollar store purchase -- and pay them off right away. That will keep them active in your credit mix.

The remaining 20% of your credit score is comprised of what types of credit make up your credit mix (10%) and how much new credit you have in your life and how quickly you took it on (10%).

Who believes your statement is correct, he just hasn't heard it expressed that way before...
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