Score! - What Separates the Winning Credit Reports from the Losers (cont.)
Contributed by Theresa Macdonald
Your Credit History Length and Your Credit Report
The longer you've been using credit, the better it looks on your credit report. This area contributes to 15 percent of your credit score. Active credit counts more than an old, unused card, though, so if you are able to regularly use and pay off credit cards you've had for a while, that will help your score. However, opening several new accounts in a short period of time to establish credit history will lower the "average account age" on your report, which doesn't look as good.
Your Variety of Credit and Your Credit Report
Credit cards, car loans, mortgages, retail accounts, and other loans are various types of credit. Ten percent of your overall credit score depends on how you use the different options. While good credit relies on good credit history, more credit is not always better. Once again, when lenders look at your credit report, they may view you as a liability.
Your New Credit and Your Credit Report
Your credit report shows every time you apply for new credit. A lot of new credit inquiries in a short period of time, regardless of your reason, can make potential creditors wary of what you are about to do. The 10 percent of your score that this area affects will look its best when you keep your opening of new accounts under control.
