By Manuel Tovar, September 24 – Hispanic Solutions Group
Do you want to get an excellent credit score? Today we point out two factors that are the most important things to focus on.
The present story we are going to share is part of CNBC’s Make It’s One-Minute Money Hacks series, which provide us with simple tips and tricks to help consumers understand their finances and take control of their money, so we want to share with you this topic and others.
To increase your credit score, you must first know the factors that the agencies consider to calculate it. For your FICO Score, the most common score used by lenders, there are five main considerations. Your FICO score is between 300 and 850. The higher the score, the more willing and confident lenders will be to lend you money for housing, cars, credit, and more.
It is known that the average American has a credit score of 711, according to studies conducted by ValuePenguin. That’s “good” when it comes to credit, but also having a “very good” (between 740 and 799) or “exceptional” (between 800 and 850) scores will give you the best credit and loan deals.
Your FICO score is determined by five factors, which are weighted differently, and is as follows:
• 1.Payment history: 35%
• 2. Amount owed: 30%
• 3.Duration of the story: 15%
• 4.New credit: 10%
• 5.Types of credit used: 10%
The first factor on the list is regarding payment history, which means paying your bills on time and in full each month. Doing so over time will improve your score. But if you don’t make a timely payment or are late, your score will drop, which will hurt you.
So we suggest, while you want to pay your entire bill to avoid accruing interest, making the minimum payment each month is enough to complete your credit report payment. And if you can’t pay the entire bill, make at least the minimum payment to stay current.
The second important factor is the amount you owe or your credit utilization rate. That is the amount of your total credit line that you are using at any given time, ideally you want to keep it low: experts recommend that it be kept below 30%.
If you have a credit card with a limit of $ 10,000, look for a balance of no more than $ 3,000 at a time. To do this, limit your expenses, make payments during the month, or request a higher limit.
The rest of your FICO score is based on how long you’ve had credit accounts open (and the longer the better); The last time you applied for a new credit card (if you apply for too many accounts in a short period of time, your score will go down); and the variety of credit used.
Finally, we recommend that maximizing all these factors is important to have a high credit score, but prioritizing payment on time and in full will definitely give you the greatest boost in achieving your goals.
If you have any questions related to finances, credits and other related topics, but do not know who to turn to, contact us by going toHispanic Solutions Group, writing to firstname.lastname@example.org, by calling 612-216-1599 or accessing financial information on YouTube, The credit channel, Our specialists in charge of Ms. Jessica Aliaga will be informing you of any concerns about this and other financial issues of general interest and guidance as in this topic, today we are giving you the following report so that you can make your economic decisions more important, he alsoWe invite you to follow our social networks: LinkendIn, Facebook, Twitter and Instagram