Your 5-Step Action Plan To Build An Impressive Credit History – Part II
Albertina Belmont
November 13, 2009
In the last part, I told you about the five major components that determine your credit score. Your 5-step action plan to improve your credit history is based on these five components only. In this article, I will walk you through the remaining steps. Here you go.
Step II: Payment History
After you get the line of credit, the next step is to take care of your payment history. It is imperative for you to understand that your payment history is the most important component of your overall credit history, as it contributes to 35% of your credit score. So, make sure that you are not late even on a single payment. Once you get a line of credit, you must manage your finances in a way to keep the payments up.
The three credit bureaus that I talked about in the previous part of this article contact your creditors every month to get the status of your payments. If your payments are not up-to-date, make sure that they are not more than 30 days past due. Your credit history is updated every month. Therefore, if you make all the payments more than sixty days late, it will affect your FICO score adversely. Such payment activities will seriously hit your credit score - negatively. Pay the bills on time if you want to build an impressive credit rating.
Step III: Amounts Owed
The total amount that you owe on the various debts is the second most important thing to take care about when it comes to maintaining your credit rating. Therefore, you must implement some good strategies to keep the amount owed under reasonable control. The best way is to make sure that the actual balance on your credit card does not cross 70% of your maximum credit limit. Charging up the credit cards is never a good idea. You can make this process automatic by obtaining a secured credit card (as discussed in detail in the previous part of this article). These cards do not allow you to spend more than the limit that´s been specified. Therefore, there is no risk of going out of control in your spending habits.
Your credit history will be at a higher risk if you have a home equity line of credit or an unsecured credit card. In that case, you are recommended not to use your credit card for an impulse buy. In this business world where alluring advertisements of various consumer products are all around you, it is definitely a challenging task to stick to this strategy. But, I know you can do this because you are a smart consumer.
There are two more steps to go – first, the types of credit used and second, the length of credit history. These are minor factors but can play a vital role in your credit history. In the next part, I will explain about how to deal with these minor factors in the most impressive manner. Meanwhile, you can visit my website for more information on credit card debt consolidation plans and how to choose the best debt management company to manage your finances.
About Author
To get well versed with the facts pertaining to credit repair is an important step to build a good credit history. To know more about the factors influencing credit scores, visit the finance enquiry blog. This blog provides answers to all questions concerning credit score.
Step II: Payment History
After you get the line of credit, the next step is to take care of your payment history. It is imperative for you to understand that your payment history is the most important component of your overall credit history, as it contributes to 35% of your credit score. So, make sure that you are not late even on a single payment. Once you get a line of credit, you must manage your finances in a way to keep the payments up.
The three credit bureaus that I talked about in the previous part of this article contact your creditors every month to get the status of your payments. If your payments are not up-to-date, make sure that they are not more than 30 days past due. Your credit history is updated every month. Therefore, if you make all the payments more than sixty days late, it will affect your FICO score adversely. Such payment activities will seriously hit your credit score - negatively. Pay the bills on time if you want to build an impressive credit rating.
Step III: Amounts Owed
The total amount that you owe on the various debts is the second most important thing to take care about when it comes to maintaining your credit rating. Therefore, you must implement some good strategies to keep the amount owed under reasonable control. The best way is to make sure that the actual balance on your credit card does not cross 70% of your maximum credit limit. Charging up the credit cards is never a good idea. You can make this process automatic by obtaining a secured credit card (as discussed in detail in the previous part of this article). These cards do not allow you to spend more than the limit that´s been specified. Therefore, there is no risk of going out of control in your spending habits.
Your credit history will be at a higher risk if you have a home equity line of credit or an unsecured credit card. In that case, you are recommended not to use your credit card for an impulse buy. In this business world where alluring advertisements of various consumer products are all around you, it is definitely a challenging task to stick to this strategy. But, I know you can do this because you are a smart consumer.
There are two more steps to go – first, the types of credit used and second, the length of credit history. These are minor factors but can play a vital role in your credit history. In the next part, I will explain about how to deal with these minor factors in the most impressive manner. Meanwhile, you can visit my website for more information on credit card debt consolidation plans and how to choose the best debt management company to manage your finances.
About Author
To get well versed with the facts pertaining to credit repair is an important step to build a good credit history. To know more about the factors influencing credit scores, visit the finance enquiry blog. This blog provides answers to all questions concerning credit score.
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