Credit Score How to Build it Up

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Credit Score How to Improve it - The Most Important Components


  • Excellent: 800 to 850
  • Very Good: 740 to 799
  • Good: 670 to 739
  • Fair: 580 to 669
  • Poor: 300 to 579


Cracking the Credit Code how to Improve Your Score and Open Doors to Opportunity, an excellent Credit Score is like money in the bank, it can save you thousands on a major purchase.

We’ll explain how your credit score is arrived at, why your credit score is important and how you can improve it, it is very important to have good credit if you are buying a house even employers are looking at credit scores to screen applicants.

There are businesses that exist solely to scrutinize your credit history. Credit card companies and other lenders rely on this information, so your credit score determines your chances to borrow money — and how favorable the terms will be.

The three major credit-reporting agencies—Equifax (, Experian (, and TransUnion (—offer reports to you by mail or via the Internet. Order one from each; you should give your credit report a yearly checkup.

Credit scores can range from 200 to above 800. Scores below 620 are considered risky; 720 and above earn excellent rates and terms.

There are five categories used in determining a credit score Payment history (35% of score): Late payments and amount owed are the two areas scrutinized most closely.

Amount owed (30% of score): Large outstanding balances do not necessarily damage your score. The significant factor is the percentage of total available credit you’re using on your credit cards. Consolidating many small credit card balances onto one card actually causes your score to go down.

Length of credit history (15% of score): You need credit to get credit, so there’s no way to improve this part of your score other than to wait.

New credit (10% of score): Applying for too much new credit in a short period of time is a common and costly mistake. Your score drops from too many credit requests in a short time.

Types of credit (10% of score): This considers the overall mix of credit —loans, mortgages, credit cards, etc. Unfortunately, scoring companies won’t disclose how accounts are weighted.

Lenders receive your score and “reason codes,” so examine these reason codes; they’re the keys to improving your score. When you get your report in the mail, you'll also want to review the following items:

Check that all items are correct. Notify the credit bureau in writing of inaccuracies. Use certified mail to send them copies of documents that dispute the incorrect entries. They have 30 days from receipt to adjust or verify the data.

It’s possible that someone else’s information might be attributed to you. You have an obligation to correct the information.
Look for inactive accounts. Close any accounts you don’t use.

Check for late payments. Request that those older than seven years be removed.

Verify and update your accounts and account numbers.

Verify your address and Social Security number.

Wait to Buy Big Ticket Items Until You Buy Your Home

Opening multiple credit cards has its pros and cons, but if you’re able to responsibly manage several credit card accounts, it can be beneficial to have more than one card, some experts say, that three lines of credit are ideal for building up credit scores.

  • Payment history (35%)
  • Credit usage (30%)
  • Age of credit accounts (15%)
  • Credit mix (10%)
  • New credit inquiries (10%)

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Payment history has the biggest impact on your credit score, followed by Credit Usage, aim for 30% or less credit utilization.

Limit your requests for new credit, Hard Inquiries can affect your credit score—adversely—for anywhere from a few months to two years, Banks could take it to mean that you need money because you’re facing financial difficulties and are therefore a bigger risk.

If you plan on purchasing a home wait until you buy it before buying big ticket items on credit because this can negatively affect your credit big time, don't apply for new credit because it will temporarily lower you credit score, must lenders check before closing on the property to see if your credit score has gone down n since you applied for the loan.

If you are getting a Home Mortgage, I have an excellent Mortgage Broker / Lender on my team, that can give you a preapproval letter within hours, just let me know and I will have him contact you.

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Happy Home Searching!