Achieve the Highest Credit Scores possible
Beyond how to apply for a credit card, chances are, you were never taught credit education in school. A working knowledge of our credit system is one of the most important things you can have in today’s society. With more than 50% of the US population never seeing their own credit reports, and nearly 90% not able to read their own credit reports, I think you will find this information very valuable.
It seems to be a common dream for people to have perfect credit and to be able to be approved for any loan or credit card you apply for. In order to make that dream a reality, you need to know what perfect credit looks like. This article is intended to help educate consumers on how to achieve perfect credit. There are many myths when it comes to how you can achieve great credit, and this article will hopefully debunk those inaccuracies.
some of what you read here may not initially make sense. There are some common myths when it comes to credit, so sit back, relax, open your mind, and get ready to learn.
Maintaining the proper mix of accounts
For optimal credit, you will want to have the proper mix the following account types. Too many of some types of credit will hurt your credit scores.
One to two mortgages appearing on a credit report is the ideal way to go. Having at least one mortgage loan will impact your scores tremendously and if you don’t have any mortgages at all, that can be something to strive to achieve.
Installment loans, such as car loans, can boost your credit rating if you have between one and three loans. Too many installment loans can cause a negative effect, so minimize them if you can. Other kinds of installment loans, like store furniture loans, don’t have the same impact on your scores as the larger installment loans will. The smaller installment loans can be a great option for those with little-to-no credit but they don’t hold the same cache’ as an installment loan with a larger value, such as a car loan or student loan.
Having anywhere between three and five revolving accounts, like credit cards, can boost your overall credit rating. The affect on your credit will depend on the type of credit card used, and the amount of credit you are granted. Department store credit cards aren’t as helpful for your score as major credit cards are. The higher your credit limit, the more they will help your score.
To further boost your scores, try and keep your revolving balances below 50% of your credit limit. Older accounts, or seasoned accounts, establish that your credit has withstood the test of time and can make you look great to a potential lender. It’s equally important to know that accounts that you cancel will only stay on your reports for two years and that cancelling a seasoned account can drop your credit scores significantly.
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