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Your Credit Score: How to Understand and Improve it

YOUR CREDIT SCORE: How to understand and improve it YOUR FIRST STEP to improving or repairing your FICO credit score is to check each credit report for errors. If you find any, dispute them directly with the relevant credit bureau. Then, get to work on boosting your score. Your credit score is determined by FIVE COMPONENTS of your credit habits. Improvements in the two most important categories-payment history and amounts owed-will have the most dramatic effect on your credit score and help you to reach your long-term financial goals. HOW A FICO SCORE BREAKS DOWN Knowing can help you improve your own score Payment history Length of 4 credit history Amounts New 3 Types of credit used owed credit 15% 35% 10% 30% 10% 2 AMOUNTS OWED Lenders like to see that your debt is PAYMENT HISTORY under control, with low credit card balances and ample available credit. Lenders prefer to award credit • Reducing your outstanding debt is the quickest way to improve to consumers with a responsible payment record. your score. > Late payments stay on your record for seven years, so do your best to pay • Pay as much as possible on your highest bills on time. interest rate • Use payment reminders to meet your accounts first, and keep making minimum payments on the rest of monthly due dates or, better yet, set up automatic payments. > If you do miss a payment, catch up as soon as you can. The longer your record of on-time payments after a late payment, the more your credit Score should improve. your accounts. 5 LENGTH AND TYPE OF CREDIT USED Lenders favor consumers with an established 1234 5678 9012 3456 credit history. • Credit cards and installment loans with a good payment history can help improve your score. • Don't open too many new accounts too quickly: Doing so will lower the average age of your credit history and hurt your score. • Managing new credit responsibly can improve your score. But don't open unnecessary accounts just to boost your score-it's unlikely to have the desired effect. REMEMBER: Once a year you can request a free copy of your credit report from all three credit bureaus at www.annualcreditreport.com. This article is general in nature and does not constitute legal, tax, or investment advice. warranties as to accuracy or completeness of this information, does not endorse any companies, products, or services described here, and takes no liability for your use of this information. SunTrust makes

Your Credit Score: How to Understand and Improve it

shared by SunTrustBank on May 02
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Consider your credit score the passport to your financial life. Your credit score, also known as a FICO score, affects your ability to obtain a credit card, a mortgage, and sometimes even a job. Keepi...

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SunTrust

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Economy
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