Managing Your Credit
- Payment History – This accounts for about 35% of your credit score. Carrying balances from month-to-month and missing payments are two factors. Other factors include the number of missed payments – 1 missed payment in 8 -10 months is not bad, and how long the payment was outstanding matters. TIP: Pay the minimum by the due date.
- How Much is Owed – This looks at the total outstanding balance in relation to the total of all credit limits and accounts for 30% of the credit score. TIP: Pay down your debt to at least 30% of the global loan limits.
- Account History – The length of time your credit account(s) have been active accounts for 15% of the score. The older the credit, the higher the value TIP: It is best to cancel newer credit accounts before older ones.
- Recent Inquiries – This accounts for 10% of your score. Too many inquiries can send a message that a client may need money, which has a negative impact on your credit score. A client ordering his or her own credit report has no impact
- Type of Credit – This accounts for 10% of your credit score. Credit is either revolving (credit cards) or installment (car loans). Higher credit scores are given to people with a blend of credit from various sources.
Collection or Bankruptcy – This has a negative impact on your credit score. Once discharged from a bankruptcy or a consumer proposal, clients can rebuild their credit.