Credit Repair

Is 742 A Good Credit Score – How To Fix Your Credit Score For Free

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Is 742 A Good Credit Score – Most Popular?

If you understand the basics of how your score is calculated then you learn how to easily and quickly make changes that will improve your credit score. There are 5 main categories:

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#1 is Payment History which makes up 35% of your score. Paying back your credit card and loan balances on time is the most important factor in your credit score. Your payment history comprises many complex components, which can confuse consumers. But experts say that ultimately, it boils down to never missing a payment, and your FICO score will remain in good shape. The primary objective of a credit score is to illustrate to lenders just how likely you are to repay your debts

#2 is Utilization which makes up 30% of your score. It compares the amount of credit being used to the total credit available to the borrower. Having a low ratio — in other words, not much debt but a lot of available credit — is good for your credit score. Experts say you should keep that ratio as low as possible, both overall, and on each card.

#3 is Credit History which is 15% of your score. A longer credit history provides more information and offers a better picture of long-term financial behavior.

#4 is New Credit and this 10% of your credit score. While new credit accounts for 10 percent of your total FICO credit score, but this doesn’t mean that opening multiple credit lines at the same time will improve your score. In fact, such behavior could suggest you are in financial trouble by needing significant access to lots of credit.

#5 is Credit Mix and this makes up the last 10% of your credit score. While this is somewhat of a vague category, experts say that repaying a variety of debt products indicates the borrower can handle all sorts of credit. According to FICO, historical data indicates that borrowers with a good mix of revolving credit and installment loans generally represent less risk for lenders.

Derogatory marks negatively impact your scores and these are things like collections and judgments. Judgments are matters of public record like civil judgments, bankruptcies and tax liens. These items stay on your credit report for 7 years.

Collections also remain on your credit report for 7 years and can often times be settled or paid off for far less than what the original debt was.

Inquiries can also have a negative impact on your credit score though the impact is relatively small and falls off of your report relatively quickly. The important thing here is that you don’t have a bunch of inquiries within a short amount of time. An inquiry here and there won’t be a big deal.

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