YOUR CREDIT SCORE EQUALS:
The weight of your positive credit
VS
The weight of your negative credit
How do you rate with your people?
Our credit score is the result of weighing the positive and negative credit entries on any report:
- If you have all positive credit entries on your report, the credit score will be higher!
- If you have even a few negative credit entries on your report, your score can significantly lower..
- If there are no positive or negative entries, the scale just rests in the middle, and no score is given at all (which doesn't help you out at all).
Therefore, not only do we need to eliminate negative credit, we also need to build positive credit, preferably at least three lines of positive revolving credit (credit cards). The links below are great places to check out when you are building positive credit. Depending on your credit situation - there are various cards to choose from. Don't try to get them all at one time!
The link to Orchard below is one of my favorites, as it will pull your credit information only one time, and let you know right off the bat which type of account you qualify for. Even if you are starting from the beginning and need to start off with a secured card! Keep in mind that running applying for credit multiple times will lower your credit score!
Orchard Bank - No Credit or bad credit cards available
Acceptance at millions of locations worldwide, including web site purchases and reservations.
Your account information is updated and at your fingertips 24/7 so you can manage it your way.
Email and text messages to remind you of your upcoming payment due date with online enrollment.
On-call customer service representatives to assist you with questions or concerns.
Baby Phat Pre-Paid Visa
Free credit builder and account text alerts
Free direct deposit of tax refunds, anticipation loans, and paychecks
Free customer service 24/7
No monthly fees and no hidden fees
WHAT EXACTLY IS POSITIVE CREDIT?
Positive credit is any entry on your credit file that reports you paying on time every month. When purchasing a home, many times it is a requirement that you have an account over $5000.00 that has been paid on time for 2 years or more, for one of your qualifying trade lines. The exact details vary depending on the policies of the lending institution that you are doing business with.
Some important facts when BUILDING POSITIVE CREDIT:
- Paying all accounts on time is a heavy weight on the positive side of the scale, and will raise your score when accounts are consistently paid on time.
- The longer the account is established the heavier weight it becomes! (Never cancel positive long standing accounts without having other credit built up for a while to take it's place- you are not required to create charges on the card, simply wait until you have other strong accounts before you cancel the card.)
- Strive to keep balances on revolving accounts at 35% or less of available maximum credit limit on all credit cards.
- Limit your credit accounts to 3-6, more is not better.
- Keep your debt to income ratio as low as possible, 40% or lower is ideal. To determine your debt to income ratio simply divide your total monthly debt by your base monthly pay. Overtime is not always factored into your income, as it is usually not guaranteed, when purchasing a home. Your loan officer can inform you of their individual policies.
- Do not apply for credit unless you are serious, several inquires will lower your score!