Tuesday, September 27, 2011

Experian PLUS Score Explanation


While checking my credit score and such, I was shown these tips. I thought they could be of some interest to some of you and wanted to share. If you have any other tips or advice for gaining credit, raising your score, etc, please feel free to leave it in a comment below!

What factors RAISE your PLUS Score:



  • You have a good cushion of available credit between your current balance and your credit limits on all open trades. This has a positive affect on your credit score. This cushion shows lenders that you are unlikely to overextend yourself financially.





  • The total balance on all your credit cards is relatively low compared to your total available credit limit. This has a positive impact on your credit score.





  • You have no open installment loans, such as auto loans, on your credit report. This positively influences your credit score because lenders feel you are more likely to pay your other bills without the fixed monthly payment attached to an installment loan.





  • You have at least 2 or more open major credit cards, such as Discover, American Express, VISA, or MasterCard, on your credit report. This often tells lenders that you are a responsible borrower and they may be more likely to see you as a good credit risk and extend you credit.





  • What factors LOWER your PLUS Score:



  • Your payment history shows 1 or more payments that were late by 30 days or more. Late payments count negatively against your credit score. Negative information can stay on your credit report for up to 7 years for some items, up to 10 years for bankruptcies and 15 years for unpaid tax liens.





  • On average, many of your accounts have been open less than 3 years. Having long term credit accounts that you consistently pay on time is an important indicator of stability to lenders.





  • Having low credit limits on your accounts and loans counts negatively against your credit score. Having a high amount of credit is a positive factor because it indicates to lenders that other creditors have trusted you by lending you money in the past. However, since your major credit card limits are generally low, lenders may think you dont have enough experience with high limits.





  • You do not have any real estate loans. Lenders recognize that obtaining and maintaining a real estate loan requires more skill and discipline than other account types. People who have real estate loans and pay them on time see an increase in their credit worthiness







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