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How to CONQUER your CREDIT SCORE
A credit score is a nasty, brutish beast.
But not only can it be beat…
You can MAKE IT WORK for you.
The key is to understand how credit scores are calculated.
And that’s exactly what I’m about to explain…
But before doing so, let’s cover a few PRELIMINARY MATTERS
Your credit score is a number between 300 and 850.
Its purpose is to gauge how likely it is that you’ll repay your debts.
The higher the number, the more likely it is that you’ll do so. DELINQUENCY RATE CREDIT SCORE Data source: FinanceandCareer.com
So, what’s a GOOD SCORE?
This is how it breaks down… www.FreeScore.com
Simple enough, right?
So here’s the question:
So here’s the question: What specific things can you do to increase your credit score?
And the answer is:
And the answer is: You have to fight fire with fire.
You have to understand how your score is calculated in order to determine the best way to improve it.
Take a look at this chart: Data source: FreeScore.com
Take a look at this chart: It shows the FIVE VARIABLES that credit agencies use to generate your score. Data source: FreeScore.com
Your payment history is the most important, with a weighting of: 35% Data source: FreeScore.com
This makes sense when you consider this chart from earlier. DELINQUENCY RATE CREDIT SCORE Data source: FinanceandCareer.com
Second is the amount of money you currently owe: 30% Data source: FreeScore.com
This is why maxed out credit cards are so bad.
The next most important is the length of your credit history: 15% Data source: FreeScore.com
This is why older people generally have better credit scores than younger people. AGE AVERAGE CREDIT SCORE Data source: CreditKarma.com
In fourth place are any new lines of credit or recent inquires: 10% Data source: FreeScore.com
Finally, are the types of credit you have experience with: 10% Data source: FreeScore.com
The two main types include:
The two main types include: Revolving accounts Like credit cards…
The two main types include: Revolving accounts Like credit cards… Installment lines of credit Like mortgages and car loans…
So, to tie everything back together into a pretty little package…
If you want to improve your credit score…
FIRST Identify which of the five variables are wanting in your case.
SECOND Prioritize their importance based on the weighting.
THIRD And then attack them one by one.
While the process takes discipline and patience, it’ll be well worth it to conquer your credit score.
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