Pay Your Bills On Time
This may seem obvious, but missing one auto loan payment can drop your scores 100 points or more. Staying on time with the loans you have reporting to the credit bureaus is a good start to make sure your scores are going in the right direction… UP! 35% of your FICO credit score is paying your current loans on time and how long you have paid them.
Easy ways to make sure you pay bills on time:
- Set up recurring bills through bill pay with your bank.
- Set up a monthly automated withdrawal with the particular bank or credit card company.
- Use a spreadsheet to keep track of all your bills and the days they come out.
- CreditCoachTracker.com (product of Texas Best Credit Repair) has built in budgeting and tracking tools to help you stay on time with your bills.
Credit Cards are a Necessity
For many that have been in trouble in the past with credit cards, they tend to avoid them in the future. However 30% of your overall FICO credit scores are just the balances you carry on your revolving accounts… Credit Cards. If you do not have a credit card or revolving account, then you miss out on nearly one-third of your FICO credit score! For this reason it is always very important to have at least one if not three credit cards reporting.
An easy way to get a credit card even if you have bad credit scores is a secured credit card.
Paying Down Current Credit Cards
If you already have credit cards how you use them is very important! The FICO scoring model scores the revolving accounts based on utilization of the credit limit. For example, if you have a credit card with a $1,000 credit limit and a balance of $900 then you are utilizing 90% of the credit limit. It is best to keep all of your credit cards at or below 19% of the limit at any given time to maximize your credit score.
If you have any questions about any of these credit topics, please contact one of our credit experts by requesting a consultation.