To keep your credit up to date and accurate is a process. We recommend that you review your credit at least once a year to prevent fraud and inaccuracies.

Credit scores:

The Credit Bureaus have an advanced algorithm for calculating your score. The score ranges from 350 to 850 and there are different scoring methods. There are three major Credit Bureaus: Transunion, Equifax and Experian. They take into account the different mixes of credit including: credit cards, car loans, personal loans and mortgages. They also take into account any negatives associated with your account such as: collections, late payments, delinquencies, tax liens. They put those together to create a financial health picture. Lenders then look at the score and base your ability to get credit on those numbers and at what interest rates.

A credit score is comprised of:

Factors included in your FICO credit score

35 percent of the score is based on your payment history. The lenders want to see how consistent and timely a consumer is on paying back their current loans. The score is affected by how many bills have been paid late, how many were sent out for collection and any bankruptcies. These will fall off over time, but the more recent any of the above happen the larger the effect on your score.

30 percent of the score is based on outstanding debt. The gross amount of home and auto loans will be taken into account. How many credit cards you have with high balances and multiple loans in the same category. It is better to keep the balance of your credit cards under 30% of your maximum limit.

15 percent of the score is based on the length of time you’ve had credit. Always keep oldest credit cards open because they have the best boost to your credit score.

10 percent of the score is based on new credit requests. Hard inquires give lenders permission to pull your credit and judge whether you qualify for new credit. Soft inquiries (which Purified Credit does) do not affect your score because every consumer has a right to check their score for educational benefits. When trying to get a loan, multiples inquired count as one inquiry per industry. This is assuming consumers are shopping around for the best rates.

10 percent of the score is based on the types of credit you currently have. It is better to have a mixture of a credit cards, a car loan and a mortgage

Tips to improve Credit:

Always pay your bills on time. Set automatic payments if you have consistently been late. this is to make sure there are not any more late payments reported to the credit agencies. The consistent payments are the best indicator to the credit lenders on future loans.

Check your credit at least once every six months. This will help prevent identity theft to your account, which can be a long and frustrating process to remove.

Don’t fall for the myth that you don’t have a credit card to have good scores. You do, and you shouldn’t let this part of your credit slip. Having and using two or three credit cards can really build your scores. Keep low balance on the cards, typically, under 30%

If your score is too low to qualify for a regular credit card, then it may be a good idea to consider a secured credit card, this is where the issuing bank gives you a credit line equal to the deposit you make. When doing this, make sure to get a card that reports to all three credit bureaus.

Have a mixture of different types of credit. The two main types of credit are: revolving, and installment loans. If you just have just credit cards or just installment loans this does not have as much of a positive affect as a mixture would. Having a mixture shows the creditors you are capable of handling and paying off different types of loans.

Keep your old credit card accounts active because the longevity of the account helps boost your score. Closing out old accounts hurts your score because you loose the positive payment history related to the account.