Pay your bills on time. Late payments can hurt your score significantly. If you have missed payments, get current and stay current. The more you pay your bills on time, the better your score.
Keep credit card balances low relative to credit limits (30 percent or lower is recommended). "Maxing out" your credit cards means you have a very high utilization rate, which significantly lowers your credit score.
Pay off debt rather than moving it around.
Open new credit accounts only as needed; new accounts decrease the average age of your total accounts. Having accounts that have been opened a long time increases your credit score.
Avoid closing credit card accounts because this also decreases the average age of your accounts.
Apply for installment loans (mortgages, car loans, etc.) within a 30-day period because most credit scoring models will count multiple inquiries within a short period of time as only one inquiry.
Your credit score is presented as a number that can fall within a range â€” usually from 350 to 850. However, some credit scoring products use different ranges â€” such as 501 to 990. If you obtain multiple credit scores and the same range was not used, you cannot directly compare the scores. For example, a credit score of 720 within the 350 to 850 range is not the same as a credit score of 720 using the 501 to 990 range.
Joel Lobb (NMLS#57916)
Senior Loan Officer
Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*