Do you have a FICO credit score under 620 points? If you do, you are probably making significantly higher payments for your auto loan, student loan interest charges, mortgage, credit cards and even auto and life insurance. Insurance rates are tied, in part, to your credit rating. Here’s the breakdown on what a credit score is based on, according to CNN Money:
35% on payment history.
30% on the amount of outstanding debt.
15% on the length of time that you ‘ve had credit.
10% on the mix of credit in a credit file.
10% on inquiries or new applications for credit.
1. Pay everything on time – always.
2. Reduce the balance on your credit cards to 25% or less of their limits.
3. Don’t close out accounts. Keep as long a credit history as possible.
4. Show as much credit as possible. The more things you are paying off, the better.
5. Stay consistent in credit habits and managing debt responsibly.