Understanding and Improving Your Credit

Updated: Jun 23

A lot of times I get this question - What is my credit score and how I can improve it?


Are you ready for this? How does it make an impact on your debt handling and borrowing?


30% Credit Utilization (Borrower’s debt burden)

35% Payment History (Any derogatory payments)

15% Length of Credit History (Number of years accounts have been active)

10% Inquiries (How often borrower looks for credit)

10% Type of Credit(Does borrower manage different types of credit?)


Tip: If your credit score is 640 and above, no matter if it shows "fair" you are in the good books of lenders


Keep this handy

1. Pay Your Bills on Time

2. Get Credit for Making Utility and Cell Phone Payments on Time

3. Pay off Debt and Keep Balances Low on Credit Cards and Other Revolving Credit

4. Apply for and Open New Credit Accounts Only as Needed

5. Don't Close Unused Credit Cards

6. Don't Apply for Too Much New Credit, Resulting in Multiple Inquiries

7. Dispute Any Inaccuracies on Your Credit Reports


Tips to Improve Credit

1. Establish a minimum of 2-3 trades with good repayment history for 24 months.

– The longer a credit facility is open and active with timely repayment,

the better the score can be.

2. Ensure trades are varied: credit cards, installment loans, lines-of-credit