Ask Ash Cash

Ask Ash Cash: What Affects Your Credit Score?

AllHipHop.com’s resident Daily Word guru and all-around inspirational guy, Ash Cash, is back with his latest installment of “Ask Ash Cash.”

Be sure to watch the video below his response, as he offers more sound advice to readers:

Peace and blessings, family, Today’s Ask Ash Cash segment is an important lesson about how your credit score works, asked by Manny Rivera… Remember if you have any questions, please send them to Questions@AskAshCash.com or ask via Twitter @IamAshCAsh using #AskAshCash.

Dear Ash Cash: What affects my credit score and what can I do to fix it?

For those who are not familiar, your credit score or F.I.C.O. is a credit reporting system started by the Fair Isaacs Corporation. It is a numerical measurement of your credit worthiness that ranges from 300 to 850. Your F.I.C.O. score is used by most lenders to determine whether or not you can obtain credit.

Your score can stop your from getting loans, renting or buying a home, purchasing a car, opening a bank account, or even getting a job. Getting a handle on your F.I.C.O. score is easy if you educate yourself on how F.I.C.O. is calculated, then discipline yourself. The five categories that are used to calculate your score are: How much debt you have or usage (30%), Your payment history (35%), Your debt usage ratio (How much you owe in relation to your credit limit) (30%),
How far back your credit history goes (15%), New credit (10%), and your mix of various types of credit (10%).

Because new credit, length of credit history, and credit mix take longer to fix, they have an immediate (6 months-one year) impact on your credit; it is important that you concentrate of paying your bills on time (35%) and bringing down your usage (30%). If you have late payments in the past, don’t fret too much because your score is damaged by the most recently reported derogatory information, so derogatory information reported prior to two years does not highly impact your score. As far as usage, just make sure that you are not spending more than 30% of your allotted credit limit, i.e. if you have a $1,000 credit card, don’t spend more than $300… If you concentrate on those two things, you will be positively affecting your score by 65%….

If your score is not good enough to obtain new credit, then apply for a secured credit card or loan.. Those are great ways to build up your score!

Congratulations!!! You are on your way to A credit! Keep staying focused, and you will get what you came for! #MindRightMoneyRight!!

Ash’Cash is a Business Consultant, Motivational Speaker, Financial Expert and the author of Mind Right, Money Right: 10 Laws of Financial Freedom. For more information, please visit his website, www.IamAshCash.com.

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