Page 10 - What Momma Didn't Teach Us - Credit Edition
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6. Credit Score Factors
What makes up a credit score? Let's take a look…
Payment history 35% -Making on time payments is essential.
One late payment can drop your score up to 100 points. If you
can only make the minimum payment, make it but don’t miss
a payment.
Credit utilization 30%- Let's say you have a $10,000 card, try
your best to never use more than 30% which is $3000. If you
happen to use more than 30%, do your best to pay the card
down before the statement date. The lower your utilization
rate the better. Utilization rate lower than 10% is ideal.
History Length 15%- Having an older credit history is a factor
with your credit score. If opening new accounts try and keep
the account open and in good standing for as long as possible.
The older the account the better. The age of your credit is
based off the average of your oldest accounts to your newest.
For example; if your oldest account is 8 years but your newest
account is 1 year, your credit history length on your report will
show a length of 4 years.
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