I was shocked when I read in a recent article in Credit Marvel that millennials don’t have A Basic Guide to Credit for Millennials.
You can get your credit report online, but there’s a difference between the credit report online and the full credit report. The full credit report includes all of your opened and closed accounts for housing, auto, and revolving credit and also includes a comprehensive payment history, including any late pays.
Here’s A Basic Guide to Credit for Millennials.
You can be on time with no missed payments and still score low. Why? “The percentage of available credit and your on-time payment history are the two biggest determinants of your credit score. Revolving credit is indeed the 800-pound gorilla in this equation. Here’s how they will rank you based upon the percentage of revolving credit that you are using:
To put this in context, if you have a $10,000 credit line and you’re using $5,001 of it, you have a “poor” ranking. And if you have a balance of $3,000, your ranking is only “fair.”
Managing Your Credit Score
Information exists on the web for managing your credit score, but this one surprised me. Should you close an old credit account? Bernice Ross at INMAN writes, “Given how revolving credit seems to be determined, it might be smart to leave accounts with zero balances open. However, you can be dinged for having access to too much credit, even if you aren’t using it.”
If you are ready to make the leap to owning a home and you have a low FICO credit score, shop around. You may get turned down by some lenders because they haven’t reduced their standards yet. Keep shopping until you find one that has. You are likely to find a better reception than you expected.
The best advice for rebuilding credit is to manage it responsibly over time. If you haven’t done that, then you need to repair your credit history before you see credit score improvement.”
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If you’d like to give us a ring, we would be more than happy to spend some time with you to help you understand the process and to get all of your questions answered. You can reach us at 402 999.0577.