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How to Keep a High Credit Score Based from your Credit Report

By Andy Snyder
Published: Friday, April 23rd, 2010

Credit score is very much important because this three digit number will help the lender forecast with some accuracy how likely a certain borrower can repay a loan. It will also help them predict how the client can make payments on time.

With the help of the credit reporting agencies and credit monitoring services, customers can view their credit score. This is of course charged by the credit reporting companies. A credit score advice would help you as a consumer on how to order a credit report so that you can have detail about your credit score.

Most lenders use the FICO method improvised by the Fair Isaac Corporation. The three major credit bureaus which are Experian, Equifax and TransUnion worked with Fair Isaac to develop the credit score method.

A first credit score advice for you is to understand the credit score is like a grade that is taken form tests, homework, attendance and anything else a teacher want to use, weighing each one according to importance to come up with a final, single-number score. It is the same for credit score.  But instead of using the scores from quizzes and papers, any information in your credit report will be the basis of your credit score.

A second advice is to know how your credit score is breakdown into percentage to determine your credit score.  The credit score number ranges from 300 to 850. The 35 percent of your score is based on your payment history. The lender is very much concern about how promptly you are in paying your bills.

As a credit score advice, make sure that you have paid all your bills on time because your credit score will be greatly affected of how many bills have been paid late. The more recent history of bankruptcies, sent out for collection and delayed payment would be worse for your overall score.

The 30 percent of the score is based on outstanding debt. Your credit report will show how much you owe for car or home loan, and how many credit cards do you have that are already at their credit limits. Make sure that you keep your card balances at 25 percent or less of their limits because card balances at 25 percent or less of their limits.

The 15 percent of the credit score is based on the length of time you have had credit. As a credit score advice, you must establish your credit for a longer period of time because you will gain higher overall credit score. This happens because the more information about your past payment gives a more accurate prediction of your future actions.

The ten percent of you score is based on the new credit you avail. When opening a new credit account, it will affect your score for a short time.   You are penalized with hard inquiries on your credit in the past year. These are the inquires that were done by your lenders while the soft inquiries which is looking at your score have no effect on it.

The last ten percent of your score came from the types of credit you currently have.  As a last credit score advice, you must have had experience with several different kinds of credit accounts. These kinds of credit accounts include revolving credit accounts and installment accounts.

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