There are literally thousands of websites that can be found when you do a search for “How to fix my credit score.” What most of these sites don’t tell you are the elements that actually comprise your credit score. When you know how each of these components affects your score, it can be easier for you to take the steps necessary to repair it.

If you have poor credit and are looking to improve your credit history, the first thing you should do is order a copy of your credit report. This will show you what most lenders see when they do a credit inquiry, and you will better understand the major problem areas of your credit history and how to start fixing it.

The first and largest component of your credit score is your payment history, which compensate for about 35% of your score. This will show you not only the payment information on your different accounts, like credit cards and installment loans, but it will also tell you if you have past due amounts, how long past due accounts are, if you have collection items, and any number of accounts paid as agreed with lenders. The first thing you can do to remedy any problems with your payment history, is to get up to date with your payments as soon as possible, and try not to miss any payments moving forward.

The second largest factor in determining your credit score is the amount and type of debt owed, which makes up about 30%. This element includes the amount you owe on specific types of accounts, the number of accounts with balances, the proportion of credit lines used compared to the total credit limit, and the proportion of installment loan still owing compared to the original loan amount. The best way to fix this area of your credit is to try to keep credit card balances as far under the maximum as possible, and if you have installment loans, to either keep your monthly payments timely or to pay off the entire balance.

The last three factors that help shape your credit score compromise 35% combined, and include the length of your credit history, the types of credit you use, and new credit, which takes into consideration the number and type of recently opened accounts, the number of, and time since, recent credit inquiries, and the re-establishment of positive credit history following past payment problems. These components may only make up 35% combined, but they can have a great affect on your score, so try not to apply for credit unless you need it. Every time you apply, whether you get turned down or accepted, your score will suffer. If you have multiple credit cards, don’t close all of them, and try to keep one or two of the older ones, which will help establish a longer credit history, but keep your balances low and payments timely.

If you can follow this guideline, you will be on your way to a better credit score in no time. It won’t happen over night; it can take up to a few years if your credit is in really bad shape, but you will be building better credit habits while you build a better credit history.

Author Bio: Dee Jurgens is the head copywriter for CyberLead, inc http://cyberleadinc.com specializing in auto sales leads http://www.carcredit.com delivering quality car loans for ten years http://myfreecreditscorenow.net Providing free credit scores for you and yours free credit score Auto Loans from http://www.afterBK.com

Category: Finances
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