Credit Crash Course

Your credit score is a number that represents how trustworthy you are to a lender (300 - 850)

Why is it Important?

  1. It is influences your ability to be approved for a loan or a credit card

  2. It influences your interest rate loans and credit cards

How is Credit Score is Calculated?

35% - Payment History - Do you Pay on Time?

30% - Amount Owed - The Less You Owe the Better 

15% - Length of Credit History - Keep Those Cards Open

10% - Inquiries and New Credit - Submitting an Application for a Credit Card

10% - Proportion of Credit Types - Installment Debt (Student Loan) vs. Revolving Debt (Credit Card)

What can I do to Increase my Credit Score?

  1. Always Pay on Time

  2. Borrow No More than 30% of Your Line of Credit on Each Credit Card

  3. Don’t Close Old Credit Card Accounts (unless they charge an annual fee)

  4. Limit Your Number of Credit Card or Loan Applications

Quick Tips:

  • Seek an increase in your credit line - as long as you don’t borrow against it, it will appear that you owe less and positively increase your credit score 

  • Rather than closing an old credit card, maintain the account with a small monthly charge (be sure to set up autopay so you don’t forget to pay for it )

  • If your credit is low due to age, strategically and intelligently open new lines of credit

Gregory LaRosa