You probably won’t gain any additional benefits from trying to get your score beyond 809 because most lenders will look at an 809 score the same way they’d look at a perfect 850 credit score. 1 Nevertheless, if you’re aiming for perfection, then you may be able to further improve your credit score. Payment history : Late payments lower your credit score.Although the two models have minor differences, both calculate credit scores based on the following factors: The first step is learning more about how credit scores work and how they’re calculated.Īs mentioned earlier, the two main credit scoring models are FICO and VantageScore. The later the payment, the more damage it will do. Credit utilization rate: This refers to the proportion of your available credit that you’re using (also known as your debt-to-credit ratio).Ĭharge-offs, collection accounts, and bankruptcies are even more damaging to your score.A lower utilization rate is better for your credit score. Many experts recommend keeping yours below 30% (meaning you should try not to reach a $3,000 balance on a credit card with a $10,000 limit). VantageScore recommends keeping your credit utilization even lower, under 10% if possible. Length of credit history : This is determined by the age of your oldest and newest credit accounts as well as the average age of all of your accounts.Old accounts that you’ve had for many years boost your credit score, whereas new accounts lower it. Credit mix : Your credit score will be lower if you don’t have a balanced mix of revolving credit accounts (e.g., credit cards and store credit) and installment accounts (e.g., mortgages, car loans, and student loans).New accounts : When you apply for a credit card or loan, the lender will run a credit check.This will trigger a hard inquiry Hard inquiries take a few points off your credit score, and the effect lasts for up to 12 months. 3 Actually opening the account can further hurt your score and have even longer-lasting effects. Here are just a couple of the differences between FICO and VantageScore: 4 VantageScore and FICO take the same factors into account to produce your score, but they weigh them slightly differently (which is why you might have different credit scores in the two models).
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