Credit Facts show that a credit score ranges from 300 to 850 and evaluates your creditworthiness through a complex mathematical formula. A higher score enhances your chances of loan approval and offers lower interest rates, while a lower score might still get you credit but at higher rates. A strong credit score can lead to major savings on mortgages, auto loans, and credit card balances.
This score serves as a crucial measure of financial reliability, guiding lending decisions. Factors include credit and payment history, utilization, credit length, and recent inquiries. Managing these elements builds a strong credit profile, leading to easier access to credit and lower interest rates, resulting in substantial cost savings over loan terms.
Pay all of your bills on time, every time. This includes your utility bills, mortgage and auto payments, and all of your revolving lines of credit like credit cards. Check your credit report at least once a year. You can find out how to challenge bad information on your credit report here.
Never charge more than 30% of your credit card balance. Banks favor a good payment history and underused credit cards. If you have high balances, prioritize reducing them below 30%. Use your cards for utility bills only, paying off the balance in full each month to boost your credit score. Keeping the cards in a safe or drawer helps manage spending. This approach ensures on-time payments and builds a positive credit history.
Keep your accounts open as long as possible, even if unused. Make occasional small purchases and pay them off to maintain account activity. The length of account history impacts your credit score significantly. Repairing your credit takes time, so don’t be discouraged by slow progress. Consistently following these habits will improve your credit score over time and help you qualify for better loans and lower interest rates. Keep these practices up throughout your life for financial health.
Delinquencies (30-180 days): A delinquency remains on your credit report for seven years from the date of the missed payment.
Collection Accounts: Collection accounts stay on your report for seven years from the original delinquency date. When paid in full, the report will show it as a ‘paid collection.’
Charge-Offs: Charge-offs also stay on your credit report for seven years from the original delinquency date, regardless of subsequent payments.
Closed Accounts: Closed accounts, whether with a balance or not, may have delinquencies reported for seven years from the closing date. Positive closed accounts remain on your report for ten years from the date of closure.
Lost Credit Card: A lost credit card report will stay on your credit report for two years from the report date, but any prior delinquencies will remain for seven years from the original delinquency date.
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If you have questions about Credit Facts or need expert credit advice, contact Credit Friendly Solutions at +1 916-680-8501. Explore our Yelp page for customer reviews and discover how we’ve helped others with their credit challenges. We’re eager to assist you in reaching your credit goals!
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