RIS Media published a report to teach consumers about how to maintain and improve one’s credit score. Everyone has become more concerned about their credit scores these days, especially when a better score can result in lower credit interest rates and payments saving thousands of dollars from interest. With this in mind, many consumers are paying more attention to their credit and, unfortunately, in the process of trying to make it better, they are harming their credit score.
A consumer credit score is made up of five key components:
35% : Payment History – Types of accounts (credit card, mortgage, etc.), accounts paid as agreed, number of past due accounts, etc.
30% : Amounts Owed – Balances of current loans, debt-to-credit ratio, proportion of installments still owed, etc.
15% : Length of Credit History – Time since accounts opened, last activity, etc.
10% New Credit – Recent inquiries, new accounts, etc.
10% Types of Credit Used – Mortgages, credit, retail, etc.