| 1. Payment History - | | | | where you transferred the money from. Keep the |
| Your history of making payments on time helps to | | | | card open, put it somewhere where you won't use it. |
| increase your credit score the most. Typically, the | | | | If the credit card company gives you a hard time |
| last 12 months of payment history is much more | | | | about not using the account after a certain period of |
| important than any other history before the last 12 | | | | time, then just charge something small once in awhile |
| months. On top of that, it is more important to keep | | | | and keep the balance low, if not at $0. |
| the mortgage payments on time than a credit card | | | | 3. Length of Credit History - This one is pretty self |
| or energy bill. | | | | explanatory. The longer you have credit history the |
| 2. Amounts Owed - This is the total balances of all | | | | better, especially on a couple of credit cards. Opening |
| revolving accounts over the total credit limits that are | | | | a new account just to take the 0% interest for a |
| reporting. Revolving accounts are credit cards and | | | | short period of time and then closing it is going to |
| personal lines of credit that you can draw on at any | | | | hurt the part of "length of credit history". To help |
| time and is an unsecured loan. A mortgage is a | | | | offset this, you want to keep at least 2 credit cards |
| secured loan to your property and you are not | | | | open for a long period of time. 2 or more years is a |
| allowed to used the remaining money you have paid | | | | good history to have. The bureaus won't even grade |
| down over time. | | | | a new account if it doesn't have at least 6 months |
| Example: Lets say you have 3 credit cards. Each of | | | | of payment history. For those people that are new |
| the three cards has a balance of $500, which gives | | | | to credit, like a college student, it is best to start at |
| you a total balance of $1500 for all three. Now, the | | | | least one account and keep the balance low and |
| credit limits of all three cards are $1500, so the total | | | | payment history on time. By the time a year or two |
| of all your limits is $4500. Take the total balance, | | | | passes, he or she will have built up a decent credit |
| $500, over the total limits, $4500, and your | | | | history, even with one account. |
| percentage of usage is 33%. It is said that you | | | | Take a look at the simple steps to rebuild your credit |
| shouldn't exceed 30% otherwise your score will start | | | | and get a detailed look at improving those credit |
| to drop, because the credit bureaus will thing you are | | | | scores. |
| charging more than you can handle. | | | | These are the types of things to keep in mind when |
| Here is another thing to keep in mind. Lets say you | | | | trying to rebuild your credit for a mortgage refinance |
| transferred one of the $500 balances to another | | | | or buying a new home. If you are looking to buy a |
| card and closed that card. You still have a total | | | | home this year or refinance your mortgage to get a |
| amount of $1500, but your total limit is $3000, since | | | | better interest rate, take the time now and use this |
| you only have two cards now. Take the $1500 over | | | | advice and get the credit scores as high as possible. |
| $3000 and your percentage is now 50%! There is | | | | This way you will save more money every month, |
| nothing wrong with transferring a high interest rate | | | | along with less interest over the life of the mortgage |
| balance to a lesser rate card, but don't close the card | | | | loan. |