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2.
The Amount of Debt
-
This makes up about 30 percent of your score. Total amount
owed is examined, as well as the different types of debt involved.
-
Maxing out your credit limit, or even coming close, will inevitably
hurt your score.
- The greater the difference between your credit
balance and your limit, the better.
3. The Amount of Time You’ve
Carried Credit
-
This is fifteen percent of your score. The longer you’ve
had credit, the better.
-
According to Fair Isaac, the average American has carried
credit for fourteen years.
4. How Many
Times You’ve Applied for Credit
-
This is ten percent of your score.
-
The more times you’ve applied for credit in a short
amount of time - without a long credit history - the lower your
score.
-
According to Fair Isaac, the average American hasn’t
applied for credit in the past 20 months.
5. The Variety of Your
Credit
-
This is 10 percent of your score.
-
Fair Isaac doesn’t explicitly reveal what they regard
as a positive credit mix, although they do say you don’t
necessarily have to have a loan of each possible type.
-
To get the best possible score, it’s recommended that
you have revolving debt, like credit cards, as well as installment
debt, like an auto loan.
-
Bank credit cards are better than store or finance company
credit cards.
-
According to Fair Isaac, the average American has four or
five bankcards, and most have at least one installment loan.
Disclaimer: This article is provided for information
use only. It does not take the place of an attorney, a tax advisor,
or an accountant. Always seek out the advice of a licensed professional
before undertaking any significant change in your financial situation.
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