What affects the credit score???

I was told that my credit scores can increase if my balances are less than 50% of the limit (obviously!!). Are there percentage scales to look at that will bring my score up, in other words...85% of the limit, 80% of the limit, 75% of the limit, 70% of the limit etc...??? I can't bring them down to 50% (although that would be great) but does it help if I try to stay below a certain percentage?? Please help me try to increase my scores.

1 Answer

  • 1 decade ago
    Favorite Answer

    Not sure I agree with the percentage limits you mention but The credit score looks at the difference between your available credit and what you’re using. Shut down accounts, and your total available credit shrinks, making your balances loom larger, which typically hurts your score.also since the score also tracks the length of your credit history. Shutting older accounts can also make your credit history look younger than it actually is, which can hurt your score.

    Some recommendations on improving or cleaning up you score:(Note:percentages are generally accepted ratios, but actual value of each factor may vary by lender)

    Pay your bills on time. Your payment history accounts for 35% of your total credit score

    30% of your score is based on how much you owe. Owing some money is fine, but if your balances are too large, lenders worry that you're overextended and won't be able to repay them.

    About 15% of your score is based on how long you've had a credit history; the longer, the better. Avoid closing a lot of old accounts or opening several new ones, because that will lower the average age of your accounts

    New credit makes up 10% of your score; lenders worry that you'll borrow too much money if you've recently opened a number of new accounts.

    Finally, 10% of your score is based on your mix of credit cards, mortgages, installment loans and other debts. Also,Lenders are most interested in your history of managing credit card debt so if your goal is to improve your credit score, pay down your credit card debt.

  • sdmike
    Lv 5
    1 decade ago

    They won't tell us EXACTLY what the levels are, but from my experience I have found that they do NOT look at them in aggregate - which means that if you have 4 cards at 50% and one maxed out, then you're still screwed.

    Try to keep all your cards at a low level and pay them down as quickly as you can. IF you play the balance transfer game to get the lower teaser rate, then make sure you are keeping an eye on the total balances.

    CAVEAT: if your goal is to work on your credit for a while and THEN use your great credit score, then the proportions TODAY really don't matter much. Do your thing, move if ALL onto Discover at 2.5% and pay aggressively. When you are ready to check your score, then transfer off the overage a couple weeks ahead of time and watch your score jump. Your score is a snapshot in time and it does not matter what your balance was yesterday (in regards to the proportion issue).

    Source(s): 10 years in CA real estate and mortgage lending in 20 states. check out : http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cr... if you're really bored and desperate for poorly organized and overly general information.
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