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What’s Holding You Back From Perfect Credit?

April 30, 2014 by  
Filed under Blogs, Credit Repair, Credit Score

by: .
850 credit score

What’s holding you back from a perfect 850 credit score?

Believe it or not, there are only a few main factors that are used to calculate your credit scores.

Based on these factors, and a credit scoring scale of 300-850,  the top reasons why your credit score isn’t higher is listed below, along with a few nuggets of advise on how to raise your credit scores.

The Top Four Reasons

1. Payment History

Your payment history accounts for 35% of your credit scores, and is the single most important factor used when calculating a credit score. Having red marks on your credit like late payments, collections, repossessions, etc…, lowers your credit score immensely.

What you can do

Pay your bills on time and fix your past mistakes. You can hire a credit repair agency to work on improving your payment history by leveraging consumer protection laws that clean up your credit reports. The Fair Credit Reporting Act gives you every opportunity to get your credit back in order, use the law to your advantage.

2. Credit Utilization Rate Is Too High

Your utilization rate is the percentage of credit that you owe (your balance) in relationship to your credit limit.

Example: Balance = $800 | Credit Limit = $1,000 | Utilization is ($800/$1,000) 80%

Lenders view a high utilization rate as a proven indicator of increased credit risk.

What you can do

Pay down your credit card balances and decrease your utilization rate to 20% or less. This means that you should never spend more than 20% of your credit limit.

3. Your Credit History Is Too Short

Your average length of open credit accounts for approximately 15% of your credit score. This shows lenders your experience with credit and lenders prefer consumers with a long length of credit over ones with a short credit history.

What you can do

Do not close old accounts, keep them active and open and they will increase your length of history. You should also limit opening new accounts because every new account decreases your average length of open credit. Be patient and your credit history will grow with time.

4. You have too many inquiries on your credit report.

Every time you apply for credit, a history of that application shows up on your credit report, this is known as an inquiry.

Inquiries are about 10% of your overall credit score and having too many of them drastically lowers your creditworthiness.  

Your inquiries can lower your score a small amount, typically 10 to 20 points.

What you can do

Apply for credit only when you need it and try to limit yourself to a maximum of one inquiry every 6 months.

If you have too many inquiries reporting to your credit reports, a credit repair agency like CreditFirm.Net can challenge those inquiries and work on removing as many of them as possible.


Bottom Line:

Pay your bills on time, keep your balances low, don’t apply for too much credit at once, don’t close old accounts, and if your credit report has a few red marks, hire a professional credit repair agency like CreditFirm.Net to help you fix your credit.


Why Choose CreditFirm.net?

Assurance. Our Credit Repair process was developed by experienced attorneys.

Speed. Documents are typically processed and sent out for investigation within 5 days.

Support. Award winning customer service guarantees your satisfaction.

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