Credit Score: Types and Length of Credit

Our credit scores play an important part in our financial futures. Credit scores determine if we get the financing we need as well as at what cost that financing will be to us. Credit scores also help to determine out insurance premiums and can even affect our chances of getting certain types of employment. It is important to maintain a good credit score, but if yours is low there is a lot you can do to change things. In this article, we will look at how types of credit and the credit history length can help raise your credit score.

Your credit score was created over a period of time. If you have a high credit score it will take a lot to un do it. The reverse is also true; if your score is low then there is no overnight cure. There are several debt management companies that will try to tell you different. If you come into contact with them then leave them be. They are not telling the truth and are likely scam artists. You need to make up your mind to pay things on time and stick to it over a considerable length of time to have any real bearing on your credit score.

If your credit history is less than 3 years old, avoid opening several new accounts at once. When the credit companies see this they get worried. It is the majority of the time a sign that someone cannot manage their credit wisely. People who do this quite often move their debt from one card to the other. This does nothing to lower the balance just changes who it is owed to.

Sometime we do need to shop for several loans at one time. For example when we buy a home several searches for the best mortgage are usually done. This doesn’t have to affect your credit score in a negative way. Most credit scoring companies recognize this pattern of behavior. To insure it doesn’t hurt you, shop for your loans all together.

Some are under the impression that to fix their old credit problems, new accounts are needed. New accounts have little bearing on your credit score even if they are paid on time. The best thing to do is bring your old account current and keep them that way.

Finally, ask to see your own credit report. This does not affect your score. It is also the only way to find mistakes and dispute information that shouldn’t be there. This can have quite an effect on your credit score.

Raising your credit score won’t happen overnight. It took time to get where it is so raising it up will take some time. Avoid scam artists that promise instant solutions, avoid opening several new accounts and keep your old ones current. This way your score will start to rise steadily and stay there.