Your credit history is a list of ALL your financial activity during your life. It list all of the credit accounts you have ever opened and how long they’ve been open.
A credit score is a number from 300 to 850.
A low score is considered 350, an average score is around 678, and the highest credit score is 850.
Credit Scores are calculated by the following:
- 35% payment history
- 30% credit owed
- 15% length of credit history
- 10% new credit
- 10% types of credit
Just like positive information will make your credit score go up- negative information will make it go down. Depending on what type this is some will stay listed on your credit report for up to 10 years. Examples of negative information are late payments, liens, court judgments, bankruptcy, and overdue child support.
Problems Bad Credit Causes
1. Inability to get a loan
2. Higher interest rate if you do get the loan
3. Larger down payment required if you do get the loan
Ways to IMPROVE your credit score
- Start paying all bills on time
- Pay off any outstanding amounts you owe
- Correct any mistakes on your report
- Pay down debts
- Don’t apply for new credit unless you really need it
Copyright 2008 by Sheila Barrett
Most importantly, don’t close out your credit cards once you have gotten caught up. Leave the cards open and you will be fine. It should be noted that it takes time to build up good credit, once again and doesn’t happen over night.