Have you ever been denied for a loan or credit card and the explanation is “Too few accounts paid as agreed” or “Not enough payment history” or “not enough accounts open”? This does not mean you are not using your current open accounts correctly nor that you are late on any payments it just could simply mean you don’t have very many accounts in your credit file. Even if you’ve paid on time, you may see this risk factor statement if you have short credit history, a “thin” credit history or both. With Credit Services of America we can help you in create credit history and how to maintain and manage your credit history.
What Impacts your credit score?
It is true that payment history and your debt ratio is a very important factor with your credit scores, also keep in mind that length and depth of credit history impacts your score. Fico uses 5 factors to determine your score: Payment History, Amounts Owed, Length of Credit History, New Credit and finally Types of Credit used.
- The length of a credit history is a matter of time. A short credit history may include accounts that have been open for a few months or years. A long credit history may span decades because open, active accounts remain indefinitely.
- The depth of a credit report considers the types of accounts you have as well as how many. A credit history with one or two accounts could be considered thin, even if those accounts are many years old. A “thick” file would have several accounts of different types, such as credit cards, installment loans or a mortgage.
There are two Types of Credited to be used Installment and Revolving:
- Installment accounts are accounts that have a start and end date time frame such as your personal loans, car loans, mortgages. It is recommended to have 1-2 installment accounts reporting to your credit report.
- Revolving accounts are accounts like your retail cards, credit cards, secure cards. It is recommended to have 3-4 accounts reporting to your credit report.
At times, a short credit history and a thin file go hand-in-hand because the person just hasn’t been using credit long enough to have a number of accounts of different types. This means lenders and credit scoring models may not have enough information to go on to determine your ability to manage credit.
With Credit Services of America we offer Tradelines that will assist in building credit profile and show lenders you have information reported to help their determination in managing credit.
How to Improve your Credit Score
Keep in mind that time is key in building your credit score. Continuing to make payments on time and managing your debt ration is important with improving your credit score. Have at least 3-4 revolving accounts and 1-2 installment accounts open at a time. As the length and depth of your credit history grows over time, your credit score will improve as well and show that you are less of a risk factor to lenders.
To help improve your score right away call us at 844-347-8727 to schedule you your free credit consultation so we can discuss how our 4 different services can help you accomplish your goals. Remember we offer credit repair, tradelines, debt settlement and student loan consolidation!
A Goal without a Plan is just a Wish. Give us a call TODAY at 844-FIX-URCR or click on the following link creditservicesofamerica.com to schedule your FREE consultation and create your personalize plan to achieve your credit and debt GOALS!