Comments on: Six Secrets of a Credit Score

By: J. Money

J. Money — Thu, 01 Apr 2010 02:39:12 +0000

Thx for helping us out Heather :)

By: Skyler

Skyler — Wed, 31 Mar 2010 23:13:55 +0000

Thanks for the comments. It clears things up a bit. I understand that “credit history” doesn’t strictly mean how long you’ve had the accounts. Just having one doesn’t mean that you’re using it wisely. I’ll be continuing to use my cards, and paying them off each month.

By: Heather

Heather — Wed, 31 Mar 2010 22:15:53 +0000

@Skyler:

Making on-time payments to your lenders is critical to maintaining a healthy credit profile, so you’ve already mastered that important step. That said, there are two other factors that help determine your credit score: credit utilization and a strong credit history. Credit utilization is the ratio of your credit card balances to credit limits, and while it’s definitely important to keep your utilization percentage low, it shouldn’t be non-existent. In other words, lenders also look at your complete credit history to determine whether you have been able to successfully pay off debt and credit accounts in the past.

If you continue to build long-term credit relationships, maintain a diverse mix of credit accounts, and keep making payments on time, you can make yourself more attractive to lenders and you may increase your chances of obtaining the best loan rates.

If you have any further questions, we would be happy to discuss them with you. Please give us a call at 312.985.3299.

Heather Schneider – education director for zendough.com by TransUnion

By: J. Money

J. Money — Tue, 30 Mar 2010 20:04:21 +0000

@weddingdress – Gotta love it!
@Skyler – That’s a great question…financially speaking, I’d have to side w/ the “not having any balances” on your cards but *still* using them actively and paying them off, but credit-score wise who knows…Smarter Spend’s answer below seems legit ;) I’ll see if I can get someone from zendough to chime in too.
@Shelley – You can get a free score from Credit Karma? no strings attached? Interesting…I’ll have to research them later.
@Smarter Spend – Thanks for sharing that with us bro, It’s def. a fine line to walk with having stuff on credit ;)

By: Smarter Spend

Smarter Spend — Tue, 30 Mar 2010 09:52:38 +0000

Skyler,

Credit scores favor using 20 – 35% of the total credit. This shows them that you use the credit card but aren’t a huge risk. Over 50% and it starts affecting your credit adversely.

By: Shelley

Shelley — Tue, 30 Mar 2010 02:40:51 +0000

I get my credit score from creditkarma,com for free. I have never run my score through a pay-for site, but I hear that it is generally correct.

By: Skyler

Skyler — Tue, 30 Mar 2010 02:04:30 +0000

I can’t remember the exact wording but a number of months ago when I tried (unsuccessfully) to get my first unsecured loan, one of the things they cited was something like “high ratio of credit to balances on revolving accounts.” At the time I had a credit card, with a credit limit that seemed to go up a couple thousand dollars every other quarter. I rarely, as in almost never, used it. I now use it regularly but pay it off each month. This seems like a big area of confusion because keeping a low balance is “good” but no balance is “bad” i.e. having a card and not using it. Am I really missing something?

By: weddingdress

weddingdress — Tue, 30 Mar 2010 02:02:45 +0000

That’s exactly why I was given a credit card in college too my mom & dad – to help build up that credit, baby!

By: J. Money

J. Money — Mon, 29 Mar 2010 21:11:13 +0000

Hah! That is awesome dude. It’s really unfortunate that we have to do little things like that, but just 1% can make all the difference in the world when it comes to mortgage rates! I think 1% off of mine would mean something like $200/mo – freakin crazy. So well done stretching it my man :)

By: Tom @ Canadian Finance Blog

Tom @ Canadian Finance Blog — Mon, 29 Mar 2010 21:05:48 +0000

This time last year I played every credit score game there was as I wanted to make sure I got the best mortgage rate possible.

The best move was probably how I left my student loan balance around $700 and had the bank reduce my minimum payment to the lowest possible of $25. Would have been simple to pay it off and be done with it, but keeping it around increased the length of my credit history by an extra 2 years!