This newsletter is compliments of:

Laurent Dropsy
President/Broker, NMLS# 341003 \ CA BRE License# 01235751

949-268-3350
laurent@rpmbancorp.com
www.rpmbancorp.com


               
 

 

Three Common Credit Score Killers

You worry about your weight and body mass index. You track your bank account balances. You pay attention to the miles you've put on your car. While all of these numbers are important, there's another you may not be giving enough thought: your credit score. Not only does your credit score play a part in your ability to obtain an auto loan, open a credit card or take out a home mortgage, it also influences the interest rate you'll pay.

To keep your FICO score from dipping into the sub-par 680 or lower bracket—where it will be difficult to obtain a loan of any kind—avoid the following three common credit score killers.

1. Carrying big balances. The percentage of your credit limit in use is your credit utilization ratio. If you carry a big balance, this percentage will be higher—and lenders don't look on that favorably. In fact, your credit utilization ratio and other measurements of your overall debt account for about 30 percent of your FICO score according to CNN Money. Experts recommend using less than 30 percent of your credit limit to maximize your score.

2. Closing credit cards. If you're no longer using a card, closing it might seem like a responsible thing to do. Unfortunately, it can actually hurt your credit because it reduces the total amount you have available. This can increase your overall debt utilization ratio if you're carrying balances on other cards. Additionally, the length of your credit history also factors into your FICO score. If you must close cards, get rid of the newest one with the lowest credit limit.

3. Paying your bills late. According to CNN Money, payment history accounts for about 35 percent of your FICO score. Even a single late payment on a credit card, student loan, mortgage, cable or mobile phone bill can bring down your score if the company reports your delinquency to the credit bureaus.


 
This newsletter is compliments of:

Laurent Dropsy
President/Broker, NMLS# 341003 \ CA BRE License# 01235751

949-268-3350
laurent@rpmbancorp.com
www.rpmbancorp.com