Unexpected businesses, such as insurance companies, have started to use credit scores to make decisions about you. Utility companies check your credit before establishing new service in your name, and some employers check your credit history (but not your actual credit score) to decide whether to give you a job, a raise, or promotion. Protecting and building your credit is more important than ever, and how you handle the following five factors can make all the difference in determining your credit score. The best thing you can do for your credit score is to make your payments on time each month. As a guideline, you should keep your credit card utilization at 30% or less, meaning only charge up to 30% of any card’s available limit. Having high balances or too much debt can heavily affect your credit score. The good news is that your credit score can improve quickly as you pay down your balances. It’s even better if you have loans for different types of assets, such as a car or a home, in addition to credit cards, and maybe a student or personal loan. However, the types of credit only constitute 10% of your credit score, so not having a certain type of credit, such as an installment loan, won’t devastate your score. The good news is that only those inquiries made within the last 12 months factor into your credit score. Inquiries completely disappear from your credit report after 24 months. Note that checking your own credit report results in a “soft” inquiry, which does not affect your credit score.
