Top Hints for Better Credit

Credit Card Bad Credit People / Credit / Top Hints for Better Credit

Top Hints for Better Credit

A working knowledge of our credit system is something that should be included in curriculums across the country and yet, few if any schools are making the effort to educate their students on how to maintain their financial health. Knowing how to check your own credit reports and how to accurately read them should be a priority for every consumer in the United States and sadly, less than 50% of residents have ever even looked at their credit reports. Of those people, it is estimated that 90% of them don't even understand how to interpret their credit reports. I think it is everyone's dream to have perfect credit, and be able to apply for anything without worrying about being turned down. But do you really know what perfect credit looks like? In this article, I will outline the perfect credit profile, and share with you how you can get on the road to achieving perfect credit for yourself.

Some of what you read here may not initially make sense. There are some common myths when it comes to credit, so sit back, relax, open your mind, and get ready to learn.

Maintaining the proper mix of accounts

For optimal credit, you will want to have the proper mix the following account types. Too many of some types of credit will hurt your credit scores. When it comes to mortgages, one or two accounts is ideal. Your credit will benefit from having at least one mortgage. If you don't have one, that can be something you can work towards.

Installment loans are loans such as car loans. Having one to three installment loans will reflect fantastically on your reports. Having too many installment loans, however, can make you look overextended. Other kinds of installment loans, such as easy credit loans for furniture and household items, aren't as valuable to your credit scores because they are smaller in balances. Consumers with less than perfect credit or no credit at all can work on building good credit with such loans, but they aren't the best way to reach the best credit scores possible.

Revolving Accounts - Credit Cards / Store Cards (Ideal 3-5 accounts): This category of account has a great deal of variance among the type of credit cards and store credit obtained. Major credit cards are more valuable to your credit than department store cards. You should shoot to have no more than about 3-5 of these type of accounts. The lower-end credit accounts such as mail-order catalogs are not looked at favorably by lenders. As with any low-end credit accounts, the more high-end accounts you have the less they hurt you.

Another factor to consider with revolving account is the length of time the account has been opened. The longer an account has been opened and responsibly cared for, the better it will reflect on your credit reports. Keeping your balances below 50% of your total credit limit can help your scores immensely. Accounts in good standing that get closed will only remain on your credit reports for two years and cancelling an aged account will most likely cause a drop in your scores.

Article Source: Credit Card Bad Credit People

About the Author

Jon Ochs is the President/CEO of Nationwide Debt Solutions, and a well respected authority on debt management programs.

Author: J.Ochs Total views: 17 Word Count: 532

Search for: credit repair, credit scores, good credit, bad credit, credit tips, credit, financial, debt, mortgage, loans, lending

Previous Article - Next Article

Copy and Paste Article Code.

Remember: The article body, title, author bio and links may not be changed or removed. By publishing this article, you agree to all the terms in our Terms of Service.

A working knowledge of our credit system is something that should be included in curriculums across the country and yet, few if any schools are making the effort to educate their students on how to maintain their financial health. Knowing how to check your own credit reports and how to accurately read them should be a priority for every consumer in the United States and sadly, less than 50% of residents have ever even looked at their credit reports. Of those people, it is estimated that 90% of them don't even understand how to interpret their credit reports. I think it is everyone's dream to have perfect credit, and be able to apply for anything without worrying about being turned down. But do you really know what perfect credit looks like? In this article, I will outline the perfect credit profile, and share with you how you can get on the road to achieving perfect credit for yourself. 
Some of what you read here may not initially make sense. There are some common myths when it comes to credit, so sit back, relax, open your mind, and get ready to learn. 
Maintaining the proper mix of accounts 
For optimal credit, you will want to have the proper mix the following account types. Too many of some types of credit will hurt your credit scores. When it comes to mortgages, one or two accounts is ideal. Your credit will benefit from having at least one mortgage. If you don't have one, that can be something you can work towards. 
Installment loans are loans such as car loans. Having one to three installment loans will reflect fantastically on your reports. Having too many installment loans, however, can make you look overextended. Other kinds of installment loans, such as easy credit loans for furniture and household items, aren't as valuable to your credit scores because they are smaller in balances. Consumers with less than perfect credit or no credit at all can work on building good credit with such loans, but they aren't the best way to reach the best credit scores possible. 
Revolving Accounts - Credit Cards / Store Cards (Ideal 3-5 accounts): This category of account has a great deal of variance among the type of credit cards and store credit obtained. Major credit cards are more valuable to your credit than department store cards. You should shoot to have no more than about 3-5 of these type of accounts. The lower-end credit accounts such as mail-order catalogs are not looked at favorably by lenders. As with any low-end credit accounts, the more high-end accounts you have the less they hurt you. 
Another factor to consider with revolving account is the length of time the account has been opened. The longer an account has been opened and responsibly cared for, the better it will reflect on your credit reports. Keeping your balances below 50% of your total credit limit can help your scores immensely. Accounts in good standing that get closed will only remain on your credit reports for two years and cancelling an aged account will most likely cause a drop in your scores. Article Source: <a href="http://www.allbestarticles.com" target="_blank">Credit Card Bad Credit People</a> About the Author: Jon Ochs is the President/CEO of Nationwide Debt Solutions, and a well respected authority on <a href="http://www.edebthelp.com">debt management programs</a>.