How Financial Institutions Determine Your Credit Worthiness
· The length of time you have had credit. Positive effect on your credit the older your credit is.
·How you pay your bills; on time, before time, or late? Pay before the bill is owed will yield a positive effect on your credit.Your credit can increase by 25-75 points in one year.
·How much do you pay each month; the minimum, 20% more, 50%more or greater? The minimum – no effect on credit
20% or more – positive effect on credit 50% or more – credit number will increase significantly.
·How many other credit cards do you have?Too many, or a reasonable amount given your income and equity? Too many – This will drag you credit down.Even if you do positive things to increase your credit, your score may not move.
·A reasonable amount of credit compared to your income will have a positive effect on your credit score.
·The types of credit you have; mortgage, installment, revolving, other types, and how often have you applied for credit. You should have credit in each category.First Time home buyers or people rebuilding credit should have credit in two of the three categories.