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Credit Scores

Building and maintaining immaculate credit.

Importance​

There is absolutely no reason why you can't have an excellent credit score. Having great credit makes life much easier, from getting an apartment or a car, to even finding a job (they can run a check on you) everything becomes easier when you have good credit.

Factors that determine Credit Score​

Credit Score Range

Your credit score will range between 300 - 850. Credit bureaus use 6 criteria when determining your score:

High impact:​

  • On-time payments - this should always be 100%!

    If you miss a payment, you will be charged a late fee by the credit card company (sometimes up to $41), however federal law prohibits companies from reporting late payments to credit bureaus until it is at least 30 days past due.

  • Credit utilization - use less than 30% of available credit at any one time

    This is one reason why you should apply for new cards regularly. Thatt increases your available credit, and as a result lowers your utilization.

  • Derogatory marks - don't have any

Medium impact:​

  • Age of credit - ideally 7+ years

    Do not close cards if possible, it will shorten your age of credit.

Low impact:​

  • Total accounts - acquire both revolving and installment credit
  • Credit inquiries - don't apply for new credit cards too frequently

    Once every 6 months is a good rule of thumb.

Maintain great credit​

To maintain a high credit score, do the following:

  • Pay off your full credit card balance every month.
  • Keep your utilization under 30%.
  • Only open a new credit card every 6 months.
  • Don't close old credit cards (unless you are paying a fee and getting nothing in return).
  • Monitor your credit score at least once a week (I use Credit Karma).
  • Review your credit reports at least once a year (I use annualcreditreport.com)

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