Understanding Your Credit Report Score (cont.)
Contributed by Rachel s Pickett
Are my credit cards maxed out?
If even one of your credit cards is maxed out it can hurt your credit score. Keeping a low balance on your credit cards will actually improve your credit report score. You should try to pay the full amount due each month.
How long have I had credit?
Believe it or not, the length of time that you have been extended credit is very important. The longer the better. Just because you can get credit, does not mean that you are getting the best rate. People who have had good credit for an extended number of years are more likely to get better interest rates and APR's.
What kinds of credit do I have?
It is good to have established credit accounts on your credit report, but too many accounts can have a negative impact on your score. Do not pay for credit you do not need. Too many credit cards, loans, or debt can be detrimental to your credit rating.
Do I pay my bills on time?
Paying all of your bills on time can also help improve your credit score. Credit lenders will often compare your total amount of debt to the total amount of credit you have been extended. If the two amounts are close or the same, your credit score is going to be lowered. It is also important to make sure that you have not defaulted on any loans. Paying off all debts is very important to improving your credit report score.
