Thirty five percent of your credit score is made up by your payment history. This includes late payments, collections, and even bankruptcies and tax liens. Each type of account will stay on your credit report a specified period of time and each type of derogatory will hurt your score differently. Score Crafters, LLC works to remove accounts that are not 100% accurate OR not 100% verifiable. Our removal rate is around 70%.
Your debt ratio is the amount of revolving credit (i.e. credit cards) you owe in relation to the amount of credit you have available. For instance, if your credit limit is $10,000 and your current balance is $2,000, your debt ratio would be 20%. While, ideally, you would have your debt ratio at 0%, we usually recommend you are at least at 30% or lower.
Length of Credit-15%
Your length of credit is how long you have had credit. At face value, this seems like something you couldn’t really do anything to fix. However, there are ways you can hurt yourself here. If you close out your older cards, even if they have higher interest rates, it will hurt your score. The credit scoring model has no memory of the credit cards you close: if you close out that fifteen year old card you will get no credit for it!
Types of Credit-10%
Types of credit include revolving and installment (credit cards or auto loan). By having different kinds of credit open, you show creditors that you are responsible and able to handle different kinds of responsibilities.
Inquiries are marked on your credit report when you ask for new credit (i.e. when you apply for a home loan). Inquiries made by yourself or for unsolicited offers do not count against your score, but are shown on your report. It is important to note than when searching for a home you are allowed unlimited inquiries over a one month period since it is assumed you are rate shopping.
New credit is a very important strategy in restoring a credit file that has been damaged due to late payments or collections. Please inquire with us on the most creative ways to open new credit and not get turned down. The scoring models react to open, well paid credit and in turn your score rehabilitates.