Many factors can damage your credit, but it doesn’t have to remain that way forever. If you want to maintain an excellent credit rating, then it’s essential for you to understand what factors affect your credit score and the steps you need to take to improve it.
Seeking advice from professional credit repair companies like Trifecta Credit Solutions, serving clients in Allentown and other cities across Pennsylvania, can be of great value.
Understanding Your Credit Score
There are two primary credit score calculation methods, FICO & Vantage, with a score range from 300 to 850.
| FICO Score Range | Vantage Score Range | |
| Excellent | 800-850 | 781-850 |
| Very Good | 740-799 | 661-780 |
| Good/Fair | 670-739 | 601-660 |
| Poor | 580-669 | 500-600 |
| Very Poor | 300-579 | 300-499 |
Factors that Influence Your Credit Rating
Always Make On Time Payments
To ensure your payments are never missed or late, keep track of bill due dates or enroll in automatic payments. The ideal on-time payment goal applies to utilities, rent, cell phone services, and all other factors included in a credit score.
If you have made late payments or missed some, they will remain on your credit report for up to seven years; however, their impact on your credit score can decrease over time. Most negative items have a negligible effect after two years, so be patient and keep making timely payments, and you’ll soon be on your way to a stellar credit score.
Regularly Monitor Your Credit Score
Regularly monitoring your credit score is essential because identity theft and reporting errors can quickly derail your history. Keep tabs on your credit report —available from each primary reporting agency once a year for free. If you catch something inaccurate on your report, send a written dispute notification to the credit bureaus.
Maintain a Good Credit Utilization Ratio
Credit utilization is an essential component of your credit score. It is calculated by the total amount you owe on credit balances relative to how much available credit you have. When it comes to credit utilization, the goal is generally 30% or less. This applies to each balance and your total estimated debt ratio. Strategies for improving credit utilization include reducing balances owed and increasing or maintaining available credit.
Minimize Hard Inquiries by Limiting Your Request for New Credit
Hard inquiries are a common form of credit check that can affect your credit score. The frequency or the type of inquiry will determine how much it affects your score. A few hard inquiries won’t change anything, but too many in a short period could mean you don’t have enough debt to cover unexpected costs, and banks may refuse to grant you credit, considering you as a high-risk customer.
Consolidate Debt
Consolidating your outstanding debts into a new loan can help you pay them off faster. You’ll also have one monthly payment instead of several, and consolidation can positively impact your credit score due to lowering your debt utilization ratio.
Prevent Identity Theft and Fraud with Credit Monitoring
Credit monitoring services provide many benefits, including helping people to avoid identity theft. If you get an alert that a new credit card account has been opened and reported to your file without your knowledge, contact the credit card company immediately if you suspect it is fraudulent.
Trifecta Credit Solutions is an expert credit repair company in Allentown and other cities across Pennsylvania. We offer reliable and convenient personal credit repair services.
