According to FICO, your payment history composes nearly 35 percent of your overall credit score. In the realm of credit reporting, past repayment behavior is used by financial institutions to determine your future repayment behavior. Reporting agencies pay close attention to the payment of credit card and installment loan debts. While the true weight this information carries on credit scores is based on he individual, skipping payments or not making minimum payments on revolving debt is the easiest way to plummet your score. Strive to never default on revolving debt, especially large installment loans such as student loans or mortgage payments.
Much like payment history weighs heavy on credit scores, the utilization ratio of credit cards determines 30 percent of your overall credit score. But what exactly is credit utilization? In the most general sense, credit utilization refers to the percent of credit you've borrowed. As a general rule of thumb, you should only use anywhere from seven to 20-percent of your total credit limit at one time. Remember, this recommendation applies to specific credit limits as well as your overall credit limit.
Entire Credit History
While not as weighty as the aforementioned, the length of your credit history determines 15-percent of your overall credit score. Elements such as how long a line of credit has been opened as well as when it was last active all play a role in determining the score of this report element. Therefore, to keep your credit score as high as possible, strive to keep all lines of credit in good standing by making payments on time and keeping credit card debt as low as possible. I recommend visiting Your650Score for more information on credit history.
Diversity of Debt
Lastly, one of the most essential elements of a perfect credit score is debt diversity. Those who have strong credit reports and high scores are those with a diverse debt profile. Instead of having the bulk of your debt on credit cards (http://your650score.com/best-credit-cards-for-650-credit-score/), attempt to spread out debt over a series of platforms. In other words, show credit bureaus you're responsible by paying on-time and always making at least the minimum payment.