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How Can I Improve My Credit?

 My credit get hit what should I do now, can I improve it? 

There is a lot of ways you can improve your credit and built a healthy credit history, I will share with you a few tips how you can achieve them, there are methods that you can do by your self and there that other people or companies can help you with that.

What is the first thing to do to improve my credit?

The first thing to do to improve and built your credit is to open a credit card, without a credit card you will not have credit, once you have opened your first credit card you can start building it, building a good credit can take time, we will have wait a wile to see results. 

What's the next thing after I opened a credit card?

Next we will start building it, to understand how credit is build we have to know the factors that credit unions use to calculate our credit score, there are 5 main factors that the credit score is calculated with.

  1. Payment history
  2. Total amount owed
  3. Length of credit history
  4. Types of credit
  5. New credit 

The first thing is payment history, that means how much times you paid on time and how much times you paid late, that factor makes up 35% of the Fico credit score, to have a good payment history you just have to make sure to never pay late.

Total amount owed makes up 30% of the Fico score, most financial advisors recommend to keep you total amount owed under 30% of your available credit, keeping it under 5% is much better, and it will build it higher.

The length of credit history have a 15% impact on the score, it is calculated the average of the oldest and newest account, the longer you have your account open the longer credit history you'll have, closing accounts is now a good idea for that reason, because it will bring down the average years your accounts being open.

Next is types of credit, it counts for 10% of a credit score, and shows if a person has a mix of installment credit, such as car loans or mortgage loans, and revolving credit, such as credit cards, or a few credit cards can also help.

The last is new credit, it is also counts for 10%, and it factors in how many new accounts a person has, how many new accounts they have applied for recently, which result in credit inquiries, and when the most recent account was opened.

Now that you see what impacts you credit and what will build it, we can start working on it to build it the right way, building credit wen starting its hard, but time should be the solution, just be patience and do the right thing and let your score grow.

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