Did you know that only 1.6% of the American population has a credit score of 850+? Coming in first place, The North Star State, Minnesota, with an average credit score of 713, go Minnesota!
What about that other ‘M’ state, Mississippi? As of 2019, The Magnolia State came in last, with a credit score of 652; better luck next year.
If you’re anything like the typical American and want to beat out Minnesota, here are five ways to help improve your credit score:
This makes up 35% of your score and is the most important factor in getting your credit score to go up. If you forget to pick up the milk on your way home, then most likely, you forget to pay your bills on time. No worries! Banks forgive you once or twice, but moving forward- pay your bills on time!
This makes up 30% of your score and is the second most important factor for improving your credit score. Your bank takes into account of how much available credit you are using.
According to FICO surveys, credit scoring “those with a score north of 750 — they’re using an average of 7 percent of their available credit.”
Average Credit Accounts
This makes up 15% of your score. Essentially- the longer you have the credit accounts, the better. Banks consider this as a form of financial responsibility. A good trick is, if you had a credit card from high school, or are just opening up one, make sure to keep it somewhere safe even if you’re not necessarily using it for at least 10 years, which is considered excellent.
This accounts for 10% of your score. Always be mindful of the credit you apply for, and how often you apply. Each inquiry gets added to your report, which results to five to ten points off your credit score. The good news is, this is the least important factor when considering your credit score.
Mix Accounts & Account Types
Just like inquires, this accounts for 10% of your score. The two main factors that go into account, are “revolving debt” and installment debt. You should always consider having a mix of both because it shows you are responsible and can manage various types of credit. The best way to do this is why having different types of assets, such as a car, a home, a student loan, and a business loan.
There you have it folks, five easy ways to improve your Credit Score!