8 Tips For Great Credit

800 credit score

Merely one percent of the public has a perfect credit score, i.E. A FICO score of 850 (on a scale of 300 to 850). People with such high credit scores have the subsequent credit qualities:

● Between 4 and 6 revolving credit card accounts.
● About thirty years of good credit use.
● At least one “installment” account (trade-line) such as an automobile loan or mortgage that is current and not late payments.
● No past due payments or other bad marks for the last seven years.
● Very few credit score inquiries (three or less) within 6 months.
● Several long standing accounts (up to twenty years old) with very good history. (To get a rating
above 800, you need ten years of excellent records.)
● Balances less than 35% of your available credit limits (credit utilization).
● No derogatory entries — liens, bankruptcies, collections, judgments, etc.)

Specifically speaking you should have long credit use of diverse accounts without any payment issues along the way. Credit scores range from 350 to 850. It’s rather difficult to obtain a perfect credit score of 850. Many people do have credit ratings in the 800’s though. But… we can work on having a better credit rating.

Now that you know the simple secrets of excellent credit, the following is what you can do to improve and maintain your credit scores:

Discover what your creditors are reporting on you

There are three major credit-reporting agencies – Experian, Equifax and TransUnion. The bureaus keep those record concerning you do with your finances and credit accounts. Some even track your check writing habits. Every twelve months and several months before obtaining a large loan, review your reports from the big three agencies. By federal law you can obtain a free report from each agency every year.

Change your credit habits right away

Self-inflicted credit wounds: If you’ve damaged your ratings by bad credit behavior with late payments, charge offs, or bankruptcies (or applying for too much credit over and over) the bad marks can be wiped out after seven to ten years. That’s a long time to wait. Since your most recent behavior carries more importance than older mistakes, promise that from now on you will be a responsible and upright financial citizen. Your scores will improve nicely.

Repair all the inaccurate, incomplete and unverifiable entries on your reports: Since your credit records cover nearly a decade of your borrowing habits, errors can happen. In fact a recent study maintains that almost eighty percent of all credit reports have inaccurate information and errors. Typical credit reporting errors are accounts that we closed and being reported as open, old outdated physical addresses or PO boxes, incorrect credit amounts, and other errors of information; some reports even contain credit history from other people with similar names or even identity theft.

Remember that your credit cards are not the same cash. They only represent money that you don’t have yet. Even though you have been granted a credit card from a store or bank you don’t actually have real money to spend. You have to make those payments to replace the credit that you used.

Don’t pay attention to what others consider an “acceptable” amount of debt: Your debt-to-income ratio is measured by how much debt you have and how much spendable income you have every month. Lenders find it acceptable to carry a debt amount of 25% of your spendable income; that is your income amount after taxes. A twenty five percent ratio is still quite high. You would probably want to keep your credit usage “called credit utilization” down to about 15% or less of your spendable income.

Moving Forward

Based on this information above, keeping your credit usage under control, not applying for too much credit too often and paying your bills at the proper times, you now have a good idea of how to raise your credit scores and maintain a good credit rating. Stay on this path and you’ll be a admirable credit consumer.

Don’t know your scores? * Get Your Reports Her e…