CreditCardsAct

Below is description on what goes into your FICO score:

• 35% – How timely you have been with payments
• 30% – How much you owe compared with your total available credit
• 15% – How long a credit history you have
• 10% – Whether you have recently taken on new credit/debit
• 10% – What mix of credit types you have

Never be late on your payments –  As you see in the pie chart above, the biggest % of your credit score comes from your payment history and how timely your are with you credit card payments. Just one late payment can reduce your credit score by a lot. If you missed a payment, pay it as soon as possible, because the longer you wait the more damage that will cause to your credit history. Remember if it was one time you can always call your lender and try to fix it.

How much you owe vs. how much credit has been extended to you – Your total credit card balances compared with your total credit limits, as well as each card’s balance relative to its limit. Because it’s second-biggest factor that affects your credit score you should pay a lot of attention to it and manage it well. Here is the example: If you have charged $1,000 on credit card and have $10,000 in credit limit, your rate is 10%. To get the best score today, 10% is perfect. Sadly, with banks decreasing credit limits and canceling unused cards, it’s harder to keep percentage that low. There is one more way to keep your credit score high, is to apply for an increase to your credit card’s overall credit limit. That way you may lose a few points in the short term, but it should not affect you negatively in a long run.

Try to use your old credit cards – Canceling credit card can affect your credit score negatively. Because banks are canceling credit cards that are not in use, try to use them to make sure it stays activated.

Star your credit history as early as possible – 15% of your score based on the length of your credit history. The longer you able to manage revolving debt, the higher your credit score will be. Keep you old cards active, do not cancel them.

There are other factors involved in your credit score, but they’re not so easy to manipulate, so focus on important points stated above.

Find out your credit score – FICO