How Do I Get a Good Credit Score?

How Do I Get a Good Credit Score?

To ensure you credit stays “good” in the long-term, it can help to pick one credit score and monitor your progress over-time. It also helps to pay attention to whatever is being cited as a “risk factor” — for instance, say, the amount of debt you’re carrying is too high — instead of a particular three-digit number. Addressing whatever is weighing down a single score will likely bolster your standing across scores. That’s because, while the exact credit score ranges may vary, most models are based on the same five categories:

• Payment History (accounts for 35% of most scores)
• Credit Utilization (accounts for 30% of most scores)
• Length of Credit History (accounts for 15% of most scores)
• Mix of Accounts (accounts for 10% of most scores)
• New Credit Inquiries (accounts for 10% of most scores)

So, to build a good credit score, you’ll need make all of your loan payments on time, keep the amount of debt you owe below at least 30% and ideally 10% of your total credit limit(s), maintain credit accounts for the long haul, add a mix of accounts (installment loans versus revolving loans, for instance) over time and manage how often you apply for new credit in a short timeframe.