1. Payment history is the most important item on your credit report. Always pay on time.
A credit history that reflects on time payments impacts and improves your credit score the most. In fact, your payment history makes up 35% of your credit score. Since making on time payments is a big factor to your credit score, consider setting up payment reminders or even enrolling in automatic payments through your credit card or loan provider.
If you run into difficulties making payments on time, contact your creditors immediately. The act of doing something shows your creditors that you are responsible and committed to open communication even during difficult times. While paying the minimum payment on time is a step in the right direction, this practice is generally not in your best interest - you'll be paying more interest and that will lead you to carry a higher balance for years to come.
2. Length of your credit history – the longer you keep an account open, the more impact it has on your overall score.
About 15% of your credit score comes from the age of your credit history, so building a good track record over time matters. It shows you know how to navigate your finances and that you have been a reliable borrower for a long time. So, the next time you think about cutting up an old credit card, think twice. Having too many accounts open can lower your score, but keeping three to four accounts available (even when not in use) could be beneficial to your overall score.
3. Credit type matters.
Your credit mix determines 10% of your credit score.There is a difference between retail store credit cards and bank credit cards (revolving accounts), loans, and mortgages (installment accounts). Having a good credit mix, especially with a positive payment history in revolving and installment credit accounts, highlights your ability to handle different types of credit. With that said, you should apply for and open credit accounts only when needed.
About Excelsior Growth Fund
Excelsior Growth Fund (EGF) helps businesses in New Jersey, New York and Pennsylvania grow by providing streamlined access to business loans and advisory services. EGF’s signature product, the EGF SmartLoan™, provides up to $100,000 in fast, transparent, and affordable financing through a secure online platform. Larger loans up to $500,000 are also available. EGF is a nonprofit organization and is certified by U.S. Department of Treasury as a Community Development Financial Institution (CDFI). Learn more atwww.excelsiorgrowthfund.org.