Get a Good Credit Score

In my opinion having a good credit score is one of the most important things in life! Anyone can maintain a high credit score no matter how rich or how poor you may be if you learn how your credit score is made up. In this article I will tell you how your credit score is made and what you can do to make your score as high as possible.

35 %- Payment History

The most important thing you can do is PAY YOUR BILLS ON TIME! Even if you are paying the minimum it is better than paying late. Although late payments stay on your credit report for 7 years the effect of late payments on your report lessens throughout the years.

30%- Debt to Credit Ratio

This is the percent of available credit you are using on your credit cards. If you have 5000 dollars available credit and have 2500 dollars charged up your debt to credit ratio is 50% which is not too good! They say you want to keep it below 30% but I think its best to keep it 20% or below. So one of the most important things to do immediately is to pay down your credit card balances. Also do not close accounts you do not use. Keep them open so you have more available credit…but DO NOT USE THEM! CUT THEM UP!

15% Length of Credit History

Having a long credit history helps your credit score so keep old accounts open even if you are not using them.

10% Inquiries

Every time you apply for a line of credit there is an inquiry on your report. Having too many inquiries in a short amount of time is bad. So even though store credit cards seem like a good idea to open because you may get 10% off your purchase it may hurt you in the long run. Inquiries only stay on your report for 12 months so it is easy to fix if that is a negative on your credit report.

10% Mix of Credit

Having a mix of credit (credit cards, home loan, student loan, auto loan etc) is what they want to see on your credit report. It shows that you can handle different kinds of credit.

So the first step in improving your credit score is to get your free report from AnnualCreditReport.com and go over it and see where you need to improve. It is important to make sure everything on your report is correct. If you find something that you believe is false you need to dispute it immediately. Good luck!