| FICO Credit scores vary between 300 to 850. These | | | | wisely. Maintaining higher balances on some credit |
| days the cutoff with most lenders for acceptance is | | | | accounts is more than likely to have a negative impact |
| 620. In the range of scores lower than that, you are | | | | on your score. |
| considered high-risk. If you are wondering, how | | | | 3) Recent Credit |
| creditors measure risk, they take into account your | | | | People that open numerous credit accounts in a small |
| credit history and score to determine whether you will | | | | timeframe could be viewed with concern. Opening up |
| be able to pay on time as per the terms of the | | | | multiple accounts quickly seems to indicate that you |
| agreement. So, low-risk candidates have a excellent | | | | could be strapped for cash (depending on your |
| credit history and a high credit score. Medium-risk | | | | utlization of credit). Multiple inquiries in a short timefram |
| candidates have a good credit history and a decent | | | | also indicate that you are shopping for credit. The |
| credit score. For high-risk, you get the picture. Whats | | | | exception to this would be inquiries for mortgage or |
| interesting to know is that by boosting your credit | | | | car loans. Multiple inquiries close to each other would |
| score by 30 points consumers could save $16 billion | | | | be considered a single inquiry. This is to enable |
| annually. Now, are you interested in boosting your | | | | consumers to shop for good rates without worrying |
| credit score? | | | | about adversely affecting their credit scores. |
| Raising your credit score from 620 to 650 is possible | | | | 4) Utilization of available credit |
| but reaching the 700s from that point will require more | | | | Having access to credit is one part of the puzzle and |
| effort and time. Before we give a quick rundown of | | | | how much you use out of that is another part. For |
| how to raise your score, lets quickly discuss what | | | | example, lets assume that you have access to 10,000 |
| credit scores are based on: | | | | through your credit cards and have no other debt. If |
| 1) Payment History | | | | you have a credit balance of $1000 then you are using |
| If you have a made late payments even by a few | | | | up 10% of the total credit available. So, your credit |
| days your score will suffer. Payments received more | | | | utilization is also at 10%. In simplest terms, its better to |
| than 30 days after the date the payment was due is | | | | have a lower utilization for higher credit scores. |
| considered late. But, creditors usually report all | | | | 5) Length of credit history |
| payments that are late and report them in different | | | | This simply means the further your credit history goes |
| batches. So, even if you are late by a day your | | | | the better it is for your score. Maintain a diverse mix of |
| account could be reported along with accounts that | | | | credit accounts and don't close old accounts. More |
| are more than 59 days late. | | | | often than not, this will help boost your score. |
| 2) Credit Balances | | | | 6) Available credit |
| Your current credit balance and your past give an idea | | | | The more diverse sources of credit you have access |
| of how much cash you keep and whether you borrow | | | | to, the better it could be for your score. |