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Written by Cyndie Martini
on April 22, 2019

It seems you almost can't do anything without a credit score. Mortgage, car loan, credit card, and even getting hired for a job are all dependent on how good your credit score is. Obtaining and keeping a great credit score is a matter of recognizing the most important components of a credit score, which we breakdown below.

1. Payment History - 35%. This is the most important component of a credit score. The payment history shows any missed or late payments. Late payments are usually categorized on credit reports by 30, 60, 90, and longer days late.

2. Credit Utilization - 30%. Credit utilization shows how much available credit you're using. If you have a credit card with a $10,000 limit that is carrying a $9,000 balance, you're using 90% of the available credit. If that is the only debt you have, your overall credit utilization is 90%. Not good. It means you're making extensive use of credit and likely overextending yourself, creating a higher risk of default.

It's difficult to say what ratio is best, but there is a general consensus among experts that 30% or lower is a good number.

3. Credit History - 15%. This refers to how long an account has been open and the last time it was used. The older an account is, the better. Lots of new accounts will show that you've been looking for additional credit and could weigh against you.

4. Credit Mix - 10%. A small factor in determining your credit score. Credit mix takes into consideration the types of accounts on your credit report.

5. New Credit - 10%. Opening a new credit account will count against your credit score. As mentioned in #3, it shows that you are seeking additional credit and very likely additional debt.

Managing your credit score mainly boils down to making on-time payments, not using more than 30% of available credit, and not opening new accounts. Following those best practices is likely to keep your credit score in the top percentile of scores.


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