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Information Is Power

Information is Power!

Here you can get a lot of information about credit reports and credit scoring. Your FICO score, that 3-digit number can be one of the most important 3-digit numbers in your life. Understanding how your score is developed and other associated information is very important. Max Score Credit in Towson, Maryland has assembled the most relevant and accurate information and make it available to you here:

35% - Payment History

This includes all types of items such as late payments, collections, bankruptcies, medical bills, charge-offs and tax liens. Each type of account will stay on your credit report for 7-10 years. Max Score Credit works to remove inaccurate accounts that are not 100% accurate, not 100% verifiable or not reported in a timely manner. 

30% - Revolving Debt Ratio

Your debt ratio is the amount of revolving credit (i.e. credit cards) you owe in relation to the amount of credit you have available. For instance, if your credit limit is $10,000 and your current balance is $2,000, your debt ratio would be 20%. While, ideally, you would have your debt ratio at 0%, we usually recommend you are at least at 10% or lower.

15% - Length of Credit

Your length of credit is how long you have had credit. At face value, this seems like something you couldn’t really do anything to fix. However, there are ways you can hurt yourself here. If you close out your older cards, even if they have higher interest rates, it will hurt your score. The credit scoring model has no memory or credit cards you close: if you close out that fifteen year old card you will get no credit for it!

10% - Types of Credit

Types of credit include revolving lines and installment loans. By having different kinds of credit open, you show creditors that you are responsible and able to handle different kinds of responsibilities.

10% - Inquiries

Inquiries are marked on your credit report when you apply for new credit (i.e. when you apply for a home loan, car loan or credit card). Inquiries made by yourself or for unsolicited offers do not count against your score, but are shown on your report.

Credit Tips

  • Check your credit report regularly for accuracy. 80% of credit reports have errors
  • Know your limits on credit card and the interest rates
  • Pay your bills on time especially the accounts that report to the credit bureau
  • Keep balances low in revolving lines of credit at all times
  • Limit how often you apply for new credit
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