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Your Credit Score Matters!

The only way have access to various investment options is to have a good credit rating. This is one of most important factors when applying for a mortgage or loan. Your credit rating is based on a score, which can topple down to a very low value, and give you no opportunity to get a loan. Before contacting your local financial advisor or lender, you should get a copy of your credit report. Your credit score will be calculated using a method called Beacon and Emperica, where there are five categories on which your credit score is based on. Each category has different weight, so they all have a different level of importance. Look at them, and try to improve on them if u can.

  1. Past Payment History (35%): If you have late payments, judgements, liens or collections against you, that is not a good sign. More weight is put on recent payment history as to payment history from 3 years ago.
  2. Amount of Credit (30%): Its best to have a low credit on your credit cards, meaning don\’t use up 90% of the limit and start paying the minimum due.
  3. Credit History (15%): Let\’s say you have a credit card for 10 years, with no infractions at all. It will be much better than a 1 year credit card with no infractions. Basic point: The longer the account is active and in good status = the better.
  4. Type of Credit You Use (10%): The types of credits you use will affect your credit score. If you have many \’buy now, pay later\’ credits; this imposes a potential risk for the lender to lend you money.
  5. Inquiries (10%): Administrative and promotion inquires will be shown on your record. So, shopping around quite often for a loan will impose a slight chance of risk. This won\’t affect your score, but it will show on your record.

So, What Can You Do To Be #1?


Don\’t hide anything, things can happen. Just be ready to explain any problem to your lenders. if there is a record on your credit history which you can explain with some information, go ahead and do that. It will be better because it places a higher chance of getting the loan.


It is always best to keep your credit below or at 30% of the available credit. If you have more than 75%, your credit rating will get affected in a negative direction.


Don\’t go bank to bank asking for a credit, because they will pull your credit report every time, and your credit lowers. (See #5 Inquiries above). Let a broker handle it for you. What they do is, pull your credit just once, and use it for all the financial lending institutions.


As you read before, applying for too many credit cards or loans will affect your credit score. So, its best to have one credit card with a high limit, than have many credit cards. Keep your credit low, as this will bring a good impression when you go for a mortgage loan or any type of loan.


Its very important to check your credit history every six months. Once in the beginning of the year, and once near the end. This is useful because, sometimes you may find errors in your report, which you can fix immediately, before it is too late.

Check Your OWN Credit History Now! Its The Beginning of 2009!

Reader Feedback

3 Responses to “Your Credit Score Matters!”

  • Pete says:

    nice tips, i really need to follow them.


  • MaciceNo Gravatar says:

    thank you very much for the tips. going to save this article on my pc.


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