Best Credit Score - Secrets To Getting the Highest Credit Score

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Your credit score is used these days for almost everything so getting the best credit score possible is imperative. Your best credit score will not be the same as anyone else’s best credit score. The good news is an excellent credit score doesn’t happen by accident and certain steps can insure you get one.

Five Secrets To Getting the Best Credit Score

There are 3 credit repositories and each has their own “secret formula” for calculating your credit score. But here is a few of those secrets let out of the bag so you can improve your credit score.

Credit Score Secret 1: Type of Credit Counts Big Time!

Mortgage credit is one of the best - An ontime mortgage payment history will insure an excellent credit

Next best kind is the installment loan -Same goes for an ontime car or personal loan payment

The credit card account is the lowest on the list - Although you need them to establish credit, you have to be very careful when using them.

Credit Score Secret 2: On Time Credit Card Payments Don’t Automatically Improve Credit Score!

When it comes to credit card debt, the secret formula likes credit card debt the least because they can be added to at any time and you are not paying them on a fixed term. That’s why the repository actually lowers your score if you have too many credit cards with high balances on them. It thinks you are a paycheck away from bankruptcy and your score will reflect that.

People always complain that they make all their payments on time so their credit score should be higher. Well great, but you have 15 credit cards with high balances. The repository is looking into the future and not liking what it sees.

Credit Score Secret 3: Many Credit Inquiries in a Short Period Hurt!

The repository also looks at the amount of people pulling your credit. If several companies pull your credit then the computer thinks you are getting ready to go on a spending spree and it will lower your scores. This is NOT true when shopping for cars or mortgages if all the pulls are done in the same 90 day period but applies more to a bunch of credit card applications in a short period.

Credit Score Secret 4: Your Balances and How You Pay Can Improve Your Credit Score!

Always look at the outstanding balance and compare it to the “total credit limit”. You want no more than a 60% ratio. If you have a credit card with a limit of $6,000 never charge more than $3600…60% of the limit. This really works…use it!

Next, always make a payment of the minimum plus 20-30%. The formula will see you not a “revolver” and not as a person who is gaming the system. Your credit scores will shoot up!

Credit Score Secret 5:True Late Payments Kill Your Credit Score!

Late payments kill your credit score…that is a given. However, many people are confused on what constitutes a late payment. A payment is considered late and reported to the repositories only if it is 30 days or more late. People may think because they missed the payment date and were charged a late charge that reflects poorly on their credit score. On a mortgage, for example, your payment is due on the 1st and late on the 15th. But, you don’t have a late payment as far as the score is concerned until the 1st of the next month.

Many folks think they have a lower credit score than they actually do. Know your score:

A credit score is affected by the kind of credit you have and your payment history. Here you’ve learn about the types of credit needed to get the best credit score. Get a free credit score for yourself and have the information so you don’t get buffaloed by an unscrupulous loan officer or at least, to know your starting point on a path toward the best credit score.

Good Luck!

Author: Rob K. Blake
Published January 22, 2008
Modified March 4, 2008