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Hello Erin,

That is a very good question.

Your payment history is the number one factor on your credit score. Making loan payments or credit card payments on time will raise your score more than any other factor.

Getting a credit card is the quickest and most effective way to start a credit profile.

Use your credit card wisely. Dan Kadlec wrote for CBS Money Watch.
"Never miss a payment. Pay in full if you can. If you must carry a balance it won't hurt you unless your balance is relatively large. Never charge more than 30% of your credit limit and preferably keep it closer to 10%. And don't apply for more than one card at once or with any frequency."

Mr. Kadlec suggested one should not close an unused credit card account. "Canceling a card can lower your score because it leaves you with less overall credit and instantly raises the percentage of debt capacity you are using. A long credit history is part of what makes for a high credit score. So keep those older accounts and make sure they are in good standing."

I hope this is helpful.


August 13, 2014 - 9:07am


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