Everyone has questions about their credit score. Even those with access to a AAA credit guide can have a knowledge gap when it comes to their credit and how it affects their financial health. With a lot of misinformation floating around on the web about credit scores and how to improve them, we thought it was time to set the record straight with a post full of common-sense answers and tips to boost your score.
What Is A Credit Score?
Your credit score is an amalgamation of all your activity as a user of credit. It is a 3 digit number formulated by an algorithm that uses information in your credit report, such as how much money you have borrowed and whether or not you were late on a payment.
It is designed to give companies a quick idea of how creditworthy you are. Ninety percent of all financial institutions in the country use the FICO credit score to evaluate potential consumers. So you had better have a good one! Find a AAA credit guide like this one that will help you improve your number.
Why Do I Have To Pay To See My Credit Score?
Well, you don’t always have to pay. But if you want to see your FICO score, you might need to pony up some cash. FICO scores are generated by companies with proprietary formulas, so that means they can make you open up your wallet if you want to know your number.
How To “They” Calculate My Credit Score?
Most agencies are pretty secretive about how they calculate your credit score, but here is a general breakdown of how it is usually created: payment history 35%, amounts owed 30%, length of credit history 15%, new credit issued 10%, types of credit 10%.
All of those factors are blended together to turn your credit history in one easily digestible number. The best attribute of a AAA credit guide is explaining all the loopholes and ways you can improve your score.
How Do I Boost My Credit Score?
First of all, try to pay off all your balances every month. And make your payments on time. It is not exotic. It is really about being organized and disciplined with your money.
If you can’t pay off your balances in full every month, try to keep your credit usage around 30%. That means if you have $10,000 available on all your cards, keep your balance right around $3,000.
Also, if you are involved in any disputes about dings on your credit report, go to whatever lengths you need to in order to eliminate those dings. Contact the company that chalked you up as a non-payer. Settle any way that you can. Follow up often to make sure those black marks are removed from your history.
With a AAACreditGuide, you can really learn a lot about the proper use of credit and how to master your personal finances. Go out and use that knowledge today. Boost that credit score!