Improve Your Credit Score

Here are the five pieces on your credit report the bureaus use to calculate your credit score. In addition you will find the approximate value each piece carries in the credit scoring model.

1. Payment History (45%)

This is where bad credit items are taken into account on your credit score. It will help to remove bad credit items.

If you are unsuccessful removing negative items you still can have a good credit score. It is rumored that after 4 years a negative item has much less impact on your score. Also you should build a positive payment history to reduce the impact a negative item will have.

2. Available Credit to Debt (30%)

This is how much credit do you have that is available. Are all your credit cards maxed out?

The bureaus like to see that you have credit that is not being used. This says you are responsible in your use of credit.

3. Length of Credit (5%)

How long have you been using credit? If you are a newbie to the world of credit you can still have a good score.

You should not worry about this aspect when it comes to improving your score. Your accounts will age naturally and this will not make or break your score.

4. Credit Experience (5%)

What sort of accounts on your credit do you have. Do you only have an auto loan?

The bureaus like your credit file to be diverse. Do not worry about this because it is such a small part of your credit score.

With time your accounts will become diverse. You will have an auto loan, credit card, boat loan and etcetera.

5. Pursuit of New Credit (15%)

How often are you applying for new credit? Are you constantly seeking new lines of credit?

If it looks like your credit is being checked continuously it will lower your credit score. The bureaus expect to see credit inquiries but excessive inquires will damage your score.

However there are individuals that literally open new lines of credit every month. These people will have their score lowered because there credit is constantly being checked.

Each credit bureau has a unique scoring model. Thus these corresponding weight values are simply estimates. If you concentrate your efforts on removing negative items from your credit report and build a positive payment history you can achieve a 700 credit score.