Credit Card Solution

Building a good credit score may seem quite difficult at first glance – but provided you know the right techniques, you can successfully do it. There are a few prerequisites involved in building a good credit score such as following market discipline and going through with debt repayment procedures.

In addition to this, you need to be very patient. By keeping a few general guidelines and making timely repayments, you can be sure of building credit. Listed below are a few pointers with information that will help you to understand the prerequisites of building a good credit score.

• Your credit score begins to accumulate when you start using your credit card in places like shopping malls and departmental stores. At this point, you are given the lowest scores. I

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Most people know that late payments will negatively affect a credit score. However, it is often unclear as to how much. Should you fret over a payment that is a little late? Does it matter how late it is? How much will it affect your score? How long will the score be affected? These are all questions that are often difficult to answer – but let’s give it a shot!

Factors That Determine Your Credit Score

First, let’s take a look at how your credit score is determined. The number one factor in determining your score is – you guessed it – payment history. This accounts for 35 percent of your score. As you can imagine, this makes paying your bills on time very important. Although

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The average VantageScore credit score fell to 748 in August (latest month available), as measured by credit bureau Experian.

However, it has only dipped eight points since 2007, just before the housing boom turned to housing bust.

The average credit score was 755 in August 2008 and 750 in August 2009.

Despite all the recent turmoil in the credit markets, which you think would have lowered credit scores even more, consumers have taken an active role in reducing debt, resulting in an improvement in their credit scores.

This has countered some of the negative effects related to foreclosures, short sales, and other derogatory events of late.

Meanwhile, the latest data from Fico (October 2008), the creator of the Fico score, revealed that the average Fico score is 713.

Unfortunately, this data isn’t very up-to-date, so it’s hard to say what impact the financial crisis has had on Fico scores.

Either way, you would have to assume that both the VantageScore and Fico score algorithms will be updated as a result of the latest crisis.

Though the updates are unknown, I would guess that because of all the foreclosures and related negative actions in recent years, credit scores for those who avoided all the problems will rise, while those who made missteps won’t be punished as badly as they may have been in the past.

Credit score Q&A: “Does salary affect credit score?”

The short answer is no.

Your salary does not affect your credit score, as it doesn’t even show up on your credit report.

However, employment history does show up on your credit report, though it doesn’t detail anything about your salary.

That said, your less-than-stunning salary won’t have any negative affect on your credit scores (yes there are multiple credit scores).

And for those of you bringing in the big bucks, doing so won’t get you any closer to the highest credit score out there (850 for Fico score, 990 for VantageScore).

But obviously there’s probably some sort of positive correlation between high salaries and high credit scores, since a major component of credit scoring involves paying bills on time.

In other words, those with plenty of money are probably more likely to pay their bills, though it’s not a perfect science.

And that’s just one of several factors that determine credit scoring – amounts owed, length of credit history, amount of new credit, and type of credit also come into play.

So make sure you pay bills on time, keep balances low, apply for new credit sparingly, and mix it up a little to ensure you wind up with a good credit score!