What Affects Your Credit?

Many people wonder what actions they take effect their Credit? What can they do to raise a Credit Score? What are the Criteria that Equifax, Experian and TransUnion use to create and reduce/raise the score? Below are the primary items these groups look at:

1. On-Time Payments: To lenders, your history of on-time payments indicates whether you'll make payments on-time in the future.

2. Oldest Credit Line: The age of your oldest account indicates to lenders how much experience you have handling credit.

3. Credit Used: Lenders look for signs of responsible credit usage, and the less you use, the better it is for your score. If it's possible, try to reduce how much you owe by paying as much as you can each month. Using less than 30% of your available credit is a good goal.

4. Recent Inquiries: With some exceptions, lenders tend to see too many recent inquiries as a sign of risk, so the fewer the better. If you're borrowing too much, a lender might see this as a sign that you're stretched too thin financially and might not be able to pay them back.

5. New Accounts: To lenders, opening too many new accounts in a short window of time could point to credit problems.

6. Available Credit: Your Debt to Income Ratio as well as the amount of Credit accessible balanced against the amount that you owe in Credit Debt.

Obviously, such things as Judgments, Foreclosure, Bankruptcy and Repossessions can also effect your credit score.  Each one of these items works differently as well.  Speak to your bankruptcy lawyer about your situation and perhaps he/she can explain this part and how bankruptcy may actually help to raise the score.