Improve Your Credit Score

Your credit score is based on five major things in your credit history:

35%- Payment history
30%- Amount you owe
15%-Length of credit
10%-Types of credit
10%- New credit

Payment History
Your Payment History is the frequency and amount you’ve paid on past debts.

In the event that a debt has been sent to collections it will stay on on the record for 7 years.
If you have a debt that has been in collections for 5 or so years (so it’s almost to the 7 year mark) do not just pay it off, because once you pay you will have “paid collections” on your record for another 7 years.

Instead, call the collections company and tell them you fully intend to pay the debt if they will write a letter to each repository (company that does credit reports — there are 3) telling them to expunge the collection once you have paid. With their affirmative answer, pay it! You have their word that it will not be on your credit report.

Amount You Owe
The amount you currently owe for your credit cards, mortgage, car, etc. is on your credit history. This can be good or bad, depending on how much you owe compared to the limit you have.

Our advise to you is to not max out your credit cards! Your credit report is based on the amount you owe on your credit card compared to the credit limit.

If your amount owed/credit limit is 0-30%: green light, 30-60%: yellow light, 60-90%: red light. Your credit score will be higher if you have three cards in the green light range as apposed to one card that is in the red light range.

Hint: Mortgages are on your credit report. If you have many loans you don’t want to continually go to the same bank. Your mortgage broker will help you (he gets paid if you get your loan).
Be up front with your mortgage broker about your loans so he can shop at different banks. If he doesn’t know where your other loans are he might try to get you a loan at a bank where you already have a loan and they could deny you.

Length of Credit
The length of time you have established credit is important. The sooner you get started building your credit, the longer you will have to create a high credit score. Get credit history started young! Buy things on your childrens’ credit so they have some established when then need it.

Types of Credit
There are different types of credit. Mortgages are good (unless you have a lot of them). Some credit cards are good and some are not.

Don’t open department store cards – cancel them. The Bay and Home Depot are okay because they will be beneficial to you.

Note: If you only have dept store cards, don’t cancel them because you need some form of credit history. Work on opening a new card (see possible good cards below) then cancel your department store cards.

New Credit
Getting new credit cards, cars, etc. can hurt your credit score because your credit is checked each time you apply for something new. Sometimes when your credit is checked it lowers your credit score.

There are hard-hit and soft-hit credit pulls. A hard-hit credit pull is not good. This is when you have a mortgage broker, car dealer, etc. pull your credit — it lowers your credit score every time you do! A soft-hit credit pull is okay. This is when you pull your own credit. You can do this as much as you’d like.

Good Credit Cards to Use

Paypal.com
AMEX Blue
AMEX Platinum Business
MBNA/AMEX Platinum Rewards – you can get immediate checks
Sky Miles Cards – these have high interest, so pay them off every month
Credit Card Calls/Checks
Discover Platinum Cards
Make all cards Platinum or Rewards cards

*When you get credit cards, make sure to get them with 0% interest for 6 or more months. This will give you a 6+ month loan with no interest.

You can find our Mortgage Calculators at
Mortgage Calculators Or get started with a Mortgage Application at Mortgage Application.