Factors That Influence Your Credit Score
Payment History - 35%
This category can have the greatest effect if you want to improve your score. However, previous problems such as missed or late payments are
more difficult to correct.
- Pay your bills on time
- If you have missed payments, get current and stay current
- Be aware that paying off a collection account will not remove it from your credit report
Amounts Owed/Capacity - 30%
This category can be easier to clean up than payment history, but it requires financial discipline and understanding the tips below.
- Keep balances low on credit cards and other “revolving credit”
- Pay off debt rather than moving it around
- Don’t close unused credit cards as a short-term strategy to raise your score
- Don’t open a number of new credit cards that you don’t need just to increase your available credit
Length of Credit History - 15%
- If you have been managing credit for a short time, don’t open a lot of new accounts too rapidly
- Never close out your oldest revolving trade line
New Credit - 10%
- Do your rate shopping for a given loan within a 14-day time frame
- Re-establish your credit history if you have had problems
- It’s okay to request and check your own credit report
Type of Credit - 10%
- Apply for and open new credit accounts only as needed
- Have credit cards – but manage them responsibly
- Moving revolving debt to installment could increase the score
- Borrowing from finance companies can have a negative impact on your score
- Note that closing an account doesn’t make it go away
Prospera Credit Union is not a certified credit counselor.