WHAT ELEMENTS IMPACT CREDIT SCORES

ELEMENTS THAT IMPACT CREDIT SCORES

LATE PAYMENTS

Your  payments history  accounts  for nearly thirty five percent of your credit score calculation.Make late payments will adversely hurt your credit score.Always pay your monthly credit card dues on time to keep your credit score in the excellent range

MISSING PAYMENTS

Not making payments at all on your credit card bills can damage your credit score to a great extent.Every month when you miss your credit card payment you are getting a step closer to having your account charged off.

ACCOUNT CHARGE OFF

When you miss making your credit card payments every month,the creditors think that

 you are not going to pay your dues at all and they get your account charged off.An account charge off can drastically bring down your credit score and put you in the bad credit score category.

ACCOUNT FORWARDED TO THE COLLECTIONS DEPARTMENT

The creditors usually hire collection agencies to collect payment from cardholders who have not being making payments of their dues despite regular reminders.The creditors might send your account to the collections department even before it is charged off.An account showing collection  status impacts a credit score negatively.

FILING BANKRUPTCY

Bankruptcy can completely destroy your credit score.It is better to look for alternatives before planning to file for bankruptcy.

HOME FORECLOSURE

Lagging behind on mortgage payments will  result  in the lender foreclose your home.The late payments on your mortgage will hurt your credit score badly and make it difficult for you to get approval for mortgage loans in the future.

CLOSING OLD CREDIT CARD ACCOUNTS

A very important factor that is taken into consideration when calculating your credit score is the length of your credit history.The longer your credit jistories the better it is for your credit score.Closure of old and oldest credit cards accounts will make your credit histories seem shorter than it is.This can hurt your credit score badly.

APPLYING FOR TOO MANY CREDIT CARD ACCOUNTS OR LOANS

Nearly 10% of your credit enquiries account for your credit score calculation.Applying for too many credit cards or loans with a short span of time can hamper your credit score.Try to keep applications to a minimum. 

CREDIT IMPROVE SCORE

A credit score that is between 350 -620 is regarded as a bad credit score. since these days everything revolves around credit score you need to take steps to raise it to  higher levels to turn it into a good credit score.

A Credit score is based on the payment history of existing accounts for the past1- 2 years, ratio of used credit to unused credit(limit to balance).A low ratio can even give you a bankruptcy score.
STEPS TO CREDIT IMPROVE SCORE

The first step that you can take is to get your credit report to know what exactly is your credit score before looking for ways to improve it.

Bring down all bills upto date and avoid late payments.If you are late even by a day the credit agencies are notified about it.

To avoid delayed payments try to make payments of your bills online as this will ensure that all your bills are paid on time.

Pay down all your credit card dues and loans that you currently have. work on getting the entire outstanding amount on your cards and loans cleared off.

Making payments on time will create new payment history for you which in turn will bring up your credit score.

To improve bad credit-Make sure to pay more than the minimum amount due especially on your credit cards as the minimum amount due hardly covers the interest payments that are charged on your credit cards every month.

As you pay off these lines of credit do not close them let them remain open as closing lines of credit will create a bad effect on your credit report.

To improve bad credit keep lines of credit open but do not use them.

Any credit card crossing over 50% of available credit line should be paid down to under half (i.e less than 25%)of the total credit line.

Settle your balances-Try to pay off any account that is with the collection agents.Contact your creditor  and make a settlement on the total dues on your card.this will allow you to pay off your debts for lesser amount than you owe which in turn will help to improve your bad credit score.

In case you have bad credit or no credit and have no credit card a/c then in such a case Try to obtain atleast 2 credit cards and make their monthly payments on time.This will improve your bad credit score.