When people come to us, they are often looking for ways to improve their credit scores with tradelines. Of course, credit scores are complex. You need to understand just what it is that you are trying to improve before spending money, right?
What Is A Credit Score?
At its most basic definition, a credit score is a three-digit number that lenders use to determine whether a person is creditworthy or not. Not all credit bureaus look at the same numbers, as different credit bureaus have different methods for determining scores. When you begin establishing your credit score, it will move anywhere between 350 and 850. A person who is more creditworthy, according to most lenders, will have higher scores on this spectrum.
How Do Credit Bureaus Determine My Credit Score?
There are plenty of factors that go into determining a credit score. The percentages that make up a credit score’s components can change depending on who is counting, though generally, the makeup will look something like this:
- On-Time Payment History: 35% of your score is your payment history. Being late on payments or missing them altogether can have a significantly negative impact on your score.
- Utilization: 30% of your score is utilization. To calculate your utilization ratio, you divide your total debt amount by your total available credit. Some credit bureaus will look at credit utilization across your various accounts while some will look at individual account utilization.
- Credit History Length: The length of your credit history includes the average age of your accounts, as well as the age of the oldest account you have, making up 15% of your score.
- Mixture of Credit: Mixing up your credit accounts is important, as it accounts for 10% of your score. Having revolving credit (like credit cards), property-secured loans, and installment loans, shows that you have a versatile account mix.
- New Credit Accounts: 10% of your score comes from opening up new accounts. The more new accounts that you open up, the more you put up a red flag that says you are at risk. Try not to open too many new accounts in a short period of time.
- If you’re looking to see how buying a tradeline might impact your creditworthiness, consider getting in touch with us today.. We’ve helped thousands of people around the country reach their credit goals by helping them implement tradelines on their accounts. Reach out today and talk to one of our tradeline specialists to find out what options might be helpful for increasing your credit.We look forward to helping you reach your financial goals..