What are companies and individuals looking for when they check your credit?

I am at a total loss to figure out how FICO scores work. My score was at a certain level (a pretty good level actually) about 4 months ago. Since then I paid off and closed about 5 accounts, and paid down 2 others, and my score goes DOWN? Is it lots of accounts with no balance but open, or few accounts open but low balance, is there even any medium you can follow to maximize your credit score? How does it work, it%26#039;s like trying to understand car insurance rates!

What are companies and individuals looking for when they check your credit?

The biggestthing they look for is that you pay your bills on time (or if late, you pay less than 30 days late).

Closing accounts can hurt your credit. It also can help it. Generally you want your Debt to Credit ratio to be close to 30% to maximize your score.

Having too many accounts open can hurt your credit.

Having a lot of account open for a short period of time then closing them can hurt it. It tends to suggest that you have spuradic income, which means your next payday could possible be several months off.

Also, don%26#039;t forget that each credit agency calculates the credit score differently. It is also not uncommon for credit bureaus to change how they calculate credit scores.

Being in the financial fields for so long, I have learned that as long as you have a credit score of 720 and up, you will almost always get the best rate that a bank offers.

What are companies and individuals looking for when they check your credit?

For some reason, closing accounts lowers you FICO scores, or so I%26#039;ve heard. Keep a couple of accounts, never be late on a payment, I don%26#039;t know what else to say.

What are companies and individuals looking for when they check your credit?

You%26#039;re right! You literally have to tip toe around to get good credit!!! I opened a bunch of accounts with random stores like Sears, Walmart etc hoping to build my credit....Well, I thought if i paid my balance each month, it would look good. Wrong, all they saw was that i suddenly opened a bunch of accounts (i looked desperate). okay, so i decide to close them all out. come to find out, it actually looks better to leave them with a zero balance than to close them all together!! I guess by closing them, maybe they see it as you not being able to control yourself by leaving them open. ITS NUTS I KNOW!

What are companies and individuals looking for when they check your credit?

Innacurate files, especially if they are in a derogatory status can significantly impact your credit score AND the possibility of qualifying to make purchases such as a home or a car..often times even a credit card!

PLUS, your interest rates can be much better with a higher credit score, which could potentially save you hundreds of dollars per month in interest payments!

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What are companies and individuals looking for when they check your credit?

I think, what they look for is stable good habits - borrow what you can pay on time, gradual upscaling of your expenditure pattterns, and responsible money management. Opening and closing accounts impulsively does not reflect well thought out financial planning on the borrower%26#039;s side.

What are companies and individuals looking for when they check your credit?

Its a good idea to have a variety of credit lines open to help balance your score. Keeping low or no balances will definitely help your score go up. You did good by paying down your 2 open accounts but may have inadvertently hurt your score with good intentions by paying off the other 5 accounts.

Paying down 75% or more on balances will help your score go up and also the length of time you keep the accounts open. A lot of it has to do with balance ratios as well as many other factors.

Example: If you have a bunch of charge cards for department stores and no Visa/Mastercard, no car loan, or no home loan your credit scores probably wouldn%26#039;t be as high compared to the scenario below.

Compare that to having 2 department store credit cards,one Visa/Mastercard credit card, one car loan, and a home loan with low balances and your credit score will probably be looking much better. As long as you don%26#039;t have any collection accounts or charge offs, judgments,etc to hinder that potentially good credit score.

Also the longer you have those open accounts with low balances you will be looking real good on credit scores.

Not too many people pay Home loans down significantly but your scores can still be very high given the scenario above.

What are companies and individuals looking for when they check your credit?

First of all companies are looking for your credit score which is made up several different things including- how many and how long your accounts have been open. Your overall balances on your open accounts compared to your overall limits. For example you said you closed about 5 accounts...and paid down two others...Well because you did that your available credit went down tremendously and therfore reducing your credit score. Also if those accounts you closed had been opened longer than the ones you have now that could have also affected your score. Sometimes when you have lower limits it also affects your credit score. Inquiries will also damage your rating if there are multiple within a certain period of time. Inquiries stay on your credit report for a minimum of two years. I would have left a couple of those accounts open just until the others were paid off...but if you have problems with charging you might have done a good thing by closing them. I have found the most information by monitoring my credit report from www.experian.com. You can also get an annual credit report for free from myfreecreditreport.com. Good luck to you.

What are companies and individuals looking for when they check your credit?

STOP CLOSING YOUR ACCOUNTS. This is what made your credit drop! Pay them off and dont close them. Keep balances unde 20% and dont ever be late and pay more than the minimums each month. These basic rule will raise your score.