- Payment History, 35%: Do you pay your bills on time? Tip: Always pay the minimum payment due on time. Sign up for automatic payments, which usually involves linking the credit card to a bank account, and schedule payments ahead of time to avoid late payments.
- Credit Utilization Ratio, 30%: How much of your credit have you used? Total Balance/Total Limit = Credit Utilization Ratio Tip: Consider asking for a credit limit increase to lower your utilization ratio (but be careful if you struggle to manage spending on your cards!)
- Length of Credit History, 15%: How long have you had credit? Tip: If you already have credit cards, try to keep your oldest accounts open. Consider putting a recurring charge on the credit card to keep it active (but be sure to pay it off on time).
- Credit Mix, 10%: Do you have different types of credit? There are two types of credit:
- Installment: Has an end date (think loans)
- Revolving: Has no end date (think credit cards)
- Credit Inquiries, 10%: How often is your credit report accessed? There are two types of inquiries:
- Hard inquiry: impacts your score (a lender pulls your credit score)
- Soft inquiry: doesn't impact your score (you pull your own credit score)
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