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What factors should you consider in determining effect on score?


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There are really 3 questions you need to look at when improving your scores...

1. What negatives do I have? While getting rid of negative may not cause your scores to jump, having negatives will decrease the positive effects of the next question. Negatives do hurt less with age...a paid CA that's 2 month's old hurts less than one that 12 months old, but, in general, concentrate on getting rid of the negatives first.

2. What positives do I have? Remember, credit scoring is all about telling creditors that they will make money off you...paying them off is nice, but they really want people that keep paying. A mix of CCs, car loans, mortgages, etc. Secured card help less than unsecured. Maxed out cards help less than low utilization...but no utilization doesn't help much at all.

3. What category do I fit in? This is the tough one. Its really not intuitive. Different scores mean different things to differenct creditors. FICO actually has what? 14 different scoring models? Again, they categorize people based on how much money they can make off you AND as a predictor for whether or not they're going to get burned.. To a CC, things like "pays bill on time" is probably less important than "is occasionally late so you get to charge late fees", whereas to a mortgage company, pays on time is a real plus.

So, at least in my opinion, bottom line is...

a. do what you can to clear off the negatives...or let them age.

b. get some real positives going

c. don't sweat the categorization. What will be will be...

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