Credit is very important and there are 6 key factors that companies look at.
1. Payment History-Late payments can harm your credit for future credit. 1 late payment can affect your credit so put your bills on autopay to make sure you're never late.
2. Credit Card Utilization-Using over 30% of your credit card usage is deemed negative on your credit. If you have a $500 credit limit, you should only carry a balance of less than $150.
3. Derogatory Marks-These are medical bills, phone bills or any other bill you've neglected.
4. Age of Credit History-Once you open your first credit card, don't close it and it will eventually improve your average history.
5. Total Accounts-You need at least 11 accounts opened to show other creditors that you have a variety of accounts and that you're responsible.
6. Hard Inquiries-Every time you apply for credit cards, apply for a car loan or house loan, they run your credit and add inquiries on your credit. More than 5 inquires is deemed negative on your credit. An inquire stay on your credit for 2 year.
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Your credit is derived from 3 different credit bureaus: Transunion, Equifax and Experian.
Your credit score need to be over 650 if you want to purchase a vehicle, buy a house or your start your own business. Usually you can have a low score on Transunion and a higher score on Experian. And sometimes credit card companies only check one bureaus.
Check your Experian credit report for all 3 credit bureaus.
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