CONSUMER CREDIT
How to Achieve an 800+ Credit Score
Credit Scoring Breakdown = 35% payment history; 30% amount owed; 10% inquiries/new debt; 10% types of credit lines, 15 % length of history 1). Make payments on time and for more than the minimum balance, if possible. A credit card/account payment is NOT considered late and will NOT be reported negatively to the credit bureaus until it is 30 days after the due date. Late fees may be assessed, however. If a late fee is assessed, contact the credit card company and ask for a full removal of the late fee, as a one time courtesy. Also request the account be re-aged to remove the late payment incident from the account completely. Most credit card companies will remove at least one late fee per year and will re-age an account if requested two times within 5 years. 2). Age of credit card/account is important. Need to have at least 3 credit cards/accounts open for a minimum of 7 years. The longer, the better. Do not close accounts just because of inactivity, if they are older, keep them open. 3). Maintain balance on credit card/account at 35 percent or lower of the credit limit. Ask for a credit limit increase, if you reach 50 percent of credit limit to keep at the 35 percent or lower. If balance on credit card is paid off every month, this doesn’t greatly help the score because credit line isn’t really being used. 4). When applying for an auto loan, pay at least 20 percent down of the total purchase price, if possible. There isn’t a big difference in scoring when financing cars, other than the 20 percent. Less than 20 percent may negatively affect scores. 5). When shopping for a mortgage, all inquires of your credit count as one inquiry within a 30 day period. When shopping for an auto loan, all inquiries made count as one inquiry within a 14 day period. Credit score should not be affected by inquiries, if timeframes are safely followed. 6). Have open credit history on varying types of accounts: mortgage, auto, gas card, store cards, etc. A total mix of 15-20 accounts is considered good. More is okay, if payment history is good. 7) Get your free credit report annually and keep as a snapshot of your credit. www.annualcreditreport.com The classic FICO score issued from Fair Isaac Corp, is your true credit score and is used by banks and financial institutions to issue credit. The Vantage score (tri-merged credit report from the 3 credit bureaus) is not your true FICO score. You may pay to get your FICO score directly from Fair Isaac at www.myfico.com For other interesting consumer credit facts and tips, please contact me or visit my website at www.nellerealtor.com Information above is based on years of work experience in the financial services division of a
major retailer that provided store and VISA credit cards, as well as National Association of Realtor consumer credit education classes. All information above is subject to change, as consumer credit policies and practices change.