credit-4Credit Basics Part 4 Experian offers some very simple but sound advice about credit scores.   This week we will be sharing some of their insights with you. 

Items that make scores better

Paying your bills on time is the single most important contributor to a good credit score. Even if the debt you owe is a small amount, it is crucial that you make payments on time. In addition, you should minimize outstanding debt, avoid overextending yourself and refrain from applying for credit needlessly.

Applications for credit show up as inquiries on your credit report, indicating to lenders that you may be taking on new debt. It may be to your advantage to use the credit you already have to prove your ongoing ability to manage credit responsibly.

If you do have negative information on your credit report, such as late payments, a public record item (e.g., bankruptcy), or too many inquiries, you may want to pay your bills and wait. Time is your ally in improving credit. There is no quick fix for bad credit.

One common question that many consumers have regarding their credit score involves understanding how very specific actions will affect their credit score. For example, someone might ask if closing two of his/her installment accounts would improve his/her credit score. While this question may appear to be easy to answer, there are many factors to consider. A credit score is based entirely on the information found on an individual’s credit report.

Any change to the credit report could affect the individual’s scores. Simply closing two accounts not only lowers the number of open installment accounts (which generally will improve your score) but it also lowers the total number of all open accounts (which generally lowers your score). Furthermore, such an action will affect the average age of all accounts that could either raise or lower your score. As you can see, one seemingly simple change actually affects a large number of items on the credit report. Therefore, it is impossible to provide a completely accurate assessment of how one specific action will affect a person’s credit score. This is why the score factors are important. They identify what elements from your credit history are having the greatest impact so that you can take appropriate action.

You can read more from the Experian website on this information at

At HOPE we help educate clients every day on how to make wise financial decisions. If you would like to know more please call us at 704-503-3669. Our staff is waiting on your call.