Home > Credit Score > Give Yourself the Gift of a Good Credit Score

Comments 0 Comments

The holidays are just around the corner. You may be thinking of all the people you need to buy gifts for. When most people do their holiday shopping, they don’t always think about how their spending impacts their credit scores.

However, A good credit score is important to your financial health and your life. Good credit improves your odds of getting approved for a loan, finding an apartment, and can even impact your job prospects.

So as you shop this holiday season, why not give yourself something that you’ll need. Why not give yourself the gift of a good credit score?

What is Your Credit Score?

Many people do not understand how a credit score works, or where they can get one.

Your credit score is a mathematic formula that estimates how likely you are to pay back money that you borrow, whether it’s a loan or a line of credit. The lower your credit score, the more likely you are to default on a loan.

The inputs into this formula are what is important. If you do the right things, then you will have excellent inputs and can give yourself a great credit score.

The next few sections will discuss specific ways you can improve your credit score.

Payment History

The most important way to maintain a good credit score is to always pay your bills on time. Your payment history makes up 35% of your credit score.

If a lender sees too many missed or late payments, then they could deny your loan application. Making your payments on time each month can really boost your credit score.

Credit Utilization

Credit utilization is also extremely important. This is the amount of credit you have and how much of it you are using. This makes up 30% of your credit score.

If you use too much of your credit limit, this can raise a red flag. You want to keep it under 30%, but even lower is better. Plus, if you pay off your balances, then you won’t pay interest. This is another advantage of keeping a low credit utilization.

Age of Credit

Your credit age makes up 15% of your credit score. Credit age is something that mostly affects younger people or those who have never had credit before.

Basically, the number of years that you have had a credit history will impact your score. If you have just received your first credit card, then you will likely have a lower score. The opposite also applies. If you have had a strong credit history for the past 30 years, then you’ll likely have a higher credit score.

Number of Credit Inquiries

Another factor important to maintaining a good credit score is how many inquiries you have. The more inquiries you have, the more it will impact your credit.

Credit inquiries is that they only make up about 10% of your credit score. Luckily, this aspect of your score is easy to control. Only apply for credit cards or loans when you feel that you need them. Do not apply for credit cards just because you want them.

You may also want to avoid applying for cards or loans that you have a low likelihood of receiving. All that does is lower your credit score without any actual benefit.

Credit Mix

The final factor in maintaining a good credit score is your credit mix. This makes up 10% of your score. Lenders and credit card issuers want to see you have multiple types of credit accounts. Doing this shows creditors that you have the ability to manage different types of accounts at the same time.

For instance, a good credit mix might look like a few credit cards, a home loan, and an auto loan. If you can make payments on time for all of those, then creditors are more likely to trust you.

Where Can I Get My Credit Score?

So you’ve decided that you want to give yourself this wonderful gift this year, but you might be wondering “where can I get my credit score?” Credit.com has you covered. We offer two free credit scores that are updated every 14 days. This also comes with a Credit Report Card which is a summary of your credit report. This summary shows how you are doing with each factor of your credit score and offers tips on improving. Sign up with Credit.com today to see where you stand and give yourself one of the best gifts possible – a great credit score!

You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team