5 min. read by Jason Gelios
There are some important things to know when it comes to your credit scores. I am going to share with you some of the key factors that make up your scores.
Credit scores range anywhere from 200 to 850. These factors are what calculates the scores:
Whether you pay your credit cards and loans on time affects your scores. Not paying things on time can negatively affect your scores.
Balances owing and where you owe them
It can be a sign that you are over extended if you have multiple balances on multiple cards or loans. However, spreading your debt out can actually help you avoid being maxed out on individual cards.
Length of your credit history
Jumping on every zero interest for 12 months offer can negatively impact your scores. Having a longer history with credit cards can positively effect your scores. Although taking advantage of a lower monthly payment offer can help you reduce or pay off your debt faster.
How much credit you have
Taking on new loans can be seen as risky at first. Even if you pay off the balance fast it can negatively affect your scores at first.
Types of credit you use
While it is preferable to have more than one type of credit such as installment loans, credit cards, mortgage etc., different types of credit affect your scores differently.
Side note: Being proactive and checking your credit scores at least one time annually can help you keep your scores in the higher range.
Jason Gelios is a Husband and Father. After that, a Top Producing REALTOR®, Author of the book Think like a REALTOR®, Creator of The AskJasonGelios Real Estate Show and Expert Media Contributor to media outlets across the country.