11/14/2024
Hello everyone, my name is Jorge Murillo. I just want it to come out here & give you some quick tips on how credit works!!!
Your payment history plays a big factor on your credit score which is 35% of your FICO score. Make sure not to miss any payments or let accounts go into collections, In order for a payment to consider late you have to be 15-30 days late. But still always try to give it before or when payment is due!!!
How much you owe on your credit cards makes up 30% of your FICO Score. This is called credit Utilization make sure you always have it below 30% of the amount balance they loan you, so for example if you have a credit card that has $1,000 limit make sure to only use $300 of it. That will keep you under the 30% mark which will make banks trust you a lot more, you can even used it all but make sure you pay it before you billing period is due.
Your history with credit accounts make up 15% of your FICO score. This basically means the longer you have an account open the better it will help your score. So for example if you have 700 credit score with 1 line of credit for 6 months, you will be considered a fake 700. Now if you have multiple accounts with previous pay off auto loans & a 650 credit score. Banks will approved you a lot more quicker & with a lower interest rates cause they see that you pay on time. That’s why having credit cards for years is way better than having a small loan for 6 months payoff, always focus on longevity when it comes to credit.
Your experiences with different types of credit, makes up 10% of your FICO score. This basically means what type of loans or credit cards are revolving on your credit score. One thing I recommend you here is to not take out small loans, Im talking about anything below $5,000 you should not consider taking out. The reason why is because if banks run your credit & they see you have a lot of small loans they will see you as a person that can’t manage their money right so they depend on small loans. Plus having a lot of accounts close under your credit is never good, credit cards are always the way to go considering since they never close out unless you don’t pay them back or willing close them.
Recent credit activity makes up 10% of your score FICO score. Every time you apply for a credit card, a loan or a car loan. They have to check your credit which sometimes it can be a Soft pull or a Hard inquiry. Make sure that whenever you gonna apply for something your credit score is at least 620 or higher cause that gives you a higher chance of qualifying & getting a low interest rate. Don’t go crazy applying for everything cause having multiple new accounts can also affect your score.
I hope this help you out understanding credit a bit more, if you have any questions feel free to message me or contacting me to my phone number at 956-754-7308 thank you🙏🏻
