CFPB VS The Credit Guy TV, Good Credit Score Tips
The CFPB gave some advise on credit scores this week. View the highlights below:
So, what builds good credit?
Pay your bills on time, every time. An automatic payment from your bank can be a good way to do that, but make sure you keep an eye on your balance so you always have enough in your account to cover the payment. You don’t want it to bounce.
Don’t get too close to your credit limit. Credit scoring models look at how close you are to being “maxed out” on credit cards. If you use too much of your total credit lines, say by carrying big balances, you can hurt your credit score. Experts advise keeping your use of credit at no more than 30% of your total credit limit — some even say (AKA THE CREDIT GUY ) you should keep it at less than 10%.
Don’t apply for too much credit in a short time. Your credit score may go down if you apply for or open a lot of new accounts in a short time. Buying something and want the discount that comes with opening a new store card? Transferring balances from an old card to a new one? Do that very often and it will show up on your credit report as lots of new credit accounts, which is likely to hurt your credit score.
The more extensive your credit history, the better. Credit scores are partly based on experience over time. The more evidence you have on how you get and pay for credit, the more information there is to determine whether you are a good credit risk.
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