The last post discussed the basics of the portion of your credit score that has to do with amounts owed. Understanding the basics of credit scoring will help you increase your score.
This makes up 30% of your credit score and only deals with your use of revolving credit. Most know it is credit cards. This does not deal with your mortgage, if you have a home equity line of credit, or car loans.
If you do not have any credit cards this is hurting your credit score.
The scoring models want to see you have 3 to 5 credit cards. Yes, when I learned this in a continuing education class I was startled.
The lesson here is they want to see you have access to credit but want to see you owe less than 20% of the high credit these creditors give you. Some say that number is 30%. As your utilization or amount owed divided by the limit your scores are giong down.
You are welcome to call Steve and learn more. 704-421-1606.
I will continue this series with 2 or 3 posts a week.