Credit Score
・How to increase your score?
- 1.Do NOT make any late payments
In general, any 30+, 60+, 90+ days late appears on your credit score. If you forgot the due date and make a payment before the next month due date, it should be fine. It will not appear on your credit report. You are only charged for a late fee.
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Public Records lowers your score significantly
(it remains on your credit report for 10 years) |
| Bankruptcy |
| Foreclosure |
| Tax Lien |
| Judgment |
| Mechanic Lien etc |
Other Records
(it remains on your credit report for 7 years) |
| Collection |
| Charge-off |
| Repossession |
- 2.Keep a long payment history
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- The longer the period without late payment, the higher the score is
- Even if you have a late payment and/or a record mentioned above, do not close the account and keep a good payment history. This will increase your score.
- 3.Various kinds of accounts
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- Those who have various kinds of accounts, such as credit cards, autos, mortgage with good payment history can have a higher score than those who only have a credit card account
- 4.Lower your ratio (current balance to credit limit)
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Generally, companies take you for granted when advertising that you should transfer the balance from one account with a higher interest rate to a lower or zero % interest rate account. This actually affects your credit score not in your favor. This is because you transfer the balance to a new card with a maximum limit.
In this example, it is better not to close high interest card even if you won’t use them. The ratio can be reduced to 33.33% (Current balance $10,000 / Total Limit $30,000)
