How Important Is Your Credit Score?

How to Get Funding With Challenged Credit or No Collateral:

Your credit score is determined by five major factors, each having a different impact on the overall score. Along with each factor, we are going to give you a quick tip to make sure you are getting the most points you can from each factor! Keep reading...

1. Payment History: This is the BIG ONE: payment history accounts for 35% of your credit score, making it the largest determinant for your overall score. The best tip we can give you here is to make sure you are paying your bills on time! Late payments will cause a major hit to your credit health and can stay on your credit report for up to 7 years.
   
   
2. Utilization: Your credit utilization accounts for about 30% of your credit score, being the second-largest determinant of your overall score. What does utilization mean? It basically lets the credit bureaus know how how much of your borrowing power you are already using; i.e. how much debt do you carry on a regular basis compared to your income. It is best to keep your revolving credit (such as credit cards) under 30% utilization to keep your score healthy. This means, if you have a credit card for $1,000, you should try to keep your outstanding balance below $300.
   
   
3. Length of Credit History: This factor accounts for about 15% of your overall credit score. It takes time and conscious effort to accumulate good credit history, which is why your credit score will improve as your credit accounts age (as long as you pay on time!). If you have a lot of new accounts on your credit report, this may impact your borrowing power initially, but the key is to keep those accounts (or existing accounts) in good standing for years to come. Our tip for this one: start practicing good credit habits early! And maybe think about asking a trusted friend or family member with a longer credit history to add you as an authorized user to boost your credit history.
   
   
4. Accumulation of New Credit: New credit accounts for 10% of your overall score. This is a smaller factor, but it is still the reason your score may drop a couple points when you get a new credit card or credit line. If you have purchased a home before, you may have seen a bigger drop in your credit score the first time your mortgage appears on your credit report - because this is a new addition of a huge amount of debt! But after a few cycles, the score should regulate back to normal as you start making payments. These dips when new accounts open are largely unavoidable, but our tip is to try not to open too many new accounts at one time.
   
   
5. Credit Mix: Credit mix accounts for the last 10% in your score. This refers to the diversity of accounts you have reporting to your credit profile. Credit bureaus like to see that you have varying types of accounts (credit cards, credit lines, term loans, mortgages) all in good standing, and from various lenders. Similar to the length of credit history, this factor should be slowly curated over time. You can also use an authorized user (whom you trust!) to help with this factor, or consider financing a purchase through a retailer - as long as you can make the payments on time AND pay off the item - to get some diversity on your credit report.

Contact us for more information on how to get funding for your business. Get started TODAY and build the business of your dreams. Here at Hope BSG, we want you to succeed!

How Far Can Good Credit Take Me??

As we briefly discussed above, your credit score can impact your life immensely. Many of our clients are trying to get approved for a house, trying to buy a car for their family, or even open a business. All of these things will require a lender to examine your credit report line-by-line. And the lenders WILL examine it line-by-line - everything from your address to the inquiries on your report. Taking the time and energy to improve your score can make a huge difference for you.

Want to Know How to Take Your Credit to the Next Level?

We hope this information was useful to you, but if you want to take the next step in improving your credit score and your financial health, we have some additional resources for you....

Our NEW DIY Credit Program is FREE and available to anyone interesting in improving their credit TODAY. Please VISIT OUR WEBPAGE for more information and to sign-up now!

If you would like a more in-depth guide to improving your credit, we have an amazing new e-book, "The DIY Credit Restoration Guide", including, "The Shocking Truth of What LexisNexis Has on YOU!" This is a great companion to our DIY Credit Program, or you can use it on your own to take your credit to the next level. VISIT OUR ONLINE STORE for more information.

Want to learn more about Business Credit?

We provide a comprehensive assessment and consultation to discuss your best path toward financial success for your business. Complete our Business Assessment today and get a jump start for your business!  CLICK HERE to complete the assessment.

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