Avoiding few mistakes can put you way ahead of the game and help you to improve your credit score in the long run.Your FICO score factors
Effects of late payment on your score
How does collection affect your score
When Charge off play the game
Hard inquires may affect your Score
Not pay your bill on time
Not keeping your “old” credit cards or old accounts
Not Pay off your high Interest and “New” Credit Accounts First
Lack of Accounts Diversity
Derogatory Mark
An Error from Data Furnisher
Identity Theft
Pro tips:-"Payment history as a record of all the things you did wrong related to your credit"
"A single late payment could have a significant effect on your credit score""Charge off has a highly negative impact on your score""Solve the problem with the original creditor before they sell the debt""Inquiries from potential creditors consider against you"Manage and use your credit responsibly to stop decreasing your credit scoreMaintain a high balance on each card and increase credit limit – Powerful LifehackOnly spending six percent of your available credit makes it difficult to gain credit increases from your credit card companies. They’re not going to raise your limits on a card you never use.What I do is charge and maintain a high balance on each card for two months. In the third month, I pay it all off and let it sit for two months. This way, I’m using my credit card enough for the bank to continue raising my limit (thus raising my available credit) while maintaining enough available credit to keep the credit agencies happy.Pre-Due Date Payments
One trick to boost the credit utilizations piece of your score without really having to change your spending behavior is to pay your bill approximately 10 days before your due date.Example:
Balance: $65
Monthly Spend: $500
Credit Limit: $1065
Due: 25th of each month
Monthly Spend Paid On Due Date (25th of the month): 53% Utilization
Monthly Spend Paid 10 Days Pre-Due Date (15th of the month): 6% Utilization
Credit Utilization Formula: Credit Used / Total CreditCredit Bumpers to Protect History – Cushion the Blow
Just one late payment that happened years ago, maybe when you were back in college, could significantly impact your score today. One trick to absorb some of the impacts of a negative on your Credit History is to use Credit Bumpers by adding more Accounts to your total number of Open Accounts. This example shows how much faster you recover from one late payment when you have 5 open accounts instead of just one.Example:
1 Account with 1 Missed Payment:
Year 1: 11 On-Time / 12 Total = 91.67% Very Poor
Year 2: 23 On-Time / 24 Total = 95.83% Very Poor
Year 3: 35 On-Time / 36 Total = 97.22% Poor
Year 4: 47 On-Time / 48 Total = 97.92% Poor
Year 5: 59 On-Time / 60 Total = 98.33% Fair5 Account with 1 Missed Payment:
Year 1: 59 On-Time / 60 Total = 98.33% Fair
Year 2: 119 On-Time / 120 Total = 99.17% Good
Year 3: 179 On-Time / 180 Total = 99.44% Good
Year 4: 239 On-Time / 240 Total = 99.58% Excellent
Year 5: 299 On-Time / 300 Total = 99.67% ExcellentCredit History Formula: On-Time Payments / Total Number of PaymentsMaintaining low balances on each Credit card can raise your score by up to 100 points
Pro tips: Many experts will tell you to stick to 30 percent of your available credit. This means if you have $1000 of credit, you should only have balances totaling $300.The truth is the more available credit you have, the better your score will be. Maintaining low balances on credit cards can raise your score by up to 100 points.I recommend keeping your available credit at 94 percent. So does Experian. I checked my own credit report one day and that’s the advice they gave me to raise my own credit score. You should only be spending $6 for every $100 of available credit you have to successfully raise your credit to the best possible score.