The 2 Most Important things on your Credit Report to Focus on...

If you want to increase your credit score, you must first learn the different factors that are used to calculate it. There's 5 different factors but only 2 of the make up 65% of your total score.

The most important factor on your credit makes up 35% of your total score. Payment history requires you to make your payments on time and never miss them. To calculate your payment history simply divide On Time Payments/Total Payments. Here’s a credit hack: make two payments a month on any debt you own and ALWAYS pay more than the minimum. You’ll accrue more interest if you carry a balance. For example, let’s say you owe $500 on your Chase credit card and a $25 minimum payment is due. Instead, make a $50 payment each time you receive income but only if you can afford it. With that being said, use your credit regularly and simply pay your bills on time.

The 2nd most important part of your credit score is credit utilization. This accounts for 30% of your score and it measures the total balances you owe divided by your total credit limits. Keep your balances at or below 30% to increase your score (See chart for example). Anything above will indicate to lenders that you’re overspending and have trouble repaying debt. For a way to spike up and improve your utilization ratio you can pay more than the minimum payment each month, ask for a higher credit limit, and pay your cards off or leave them active with a zero balance. Last tip: keep your ratio below 10% to really give your score a boost.

Now, all the factors on your credit report is important to obtain a high score. But payment history and credit utilization will boost or break your score.