No Credit Is Bad Credit

Listen up! Have you heard the saying, money is king but credit is POWER?! Well, if you haven't began leveraging the power of your credit than guess what it probably isn't growing or if it is, the pace is as slow as a snail. The fact is, until you start using credit, your credit scores can look as bad as someone who needs credit restoration. Let me explain....

Credit scores range from 300 to 850. Each of us is automatically given 350 points. That means we have to make credit work for us to the tune of 550 points.

Here's the breakdown and how to run up that 550 you need to get excellent:

Payment History (35%) = 35% x 550 = 192.5

Utilization (30%) = 30% x 550 = 165.0

Age of Accounts (15%) = 15% x 550 = 82.5

Diversity of Accts (10%) = 10% x 550 = 55.0

New Accounts (10%) = 10% x 550 = 55.0

Total points = 550 points

As you can see, getting to an excellent credit score isn't that hard. At least mathematically. Payment history and utilization make up the highest points in a credit score. The key is maintain your payment history and utilization. That means avoid making late payments on credit cards and other loans. One late payment can drop your score by 100 points. Also, never use more than 10% of your credit limit - 0% - 8% utilization is most ideal.

This information is for educational purposes only and based on the author's experiences. If you are in need of credit counseling, please schedule a call for proper assessment of your credit profile needs.