Your Credit Score

November 17, 2010

Interview with Fred Rewey, author of the book Winning the Cash Flow War: Your Ultimate Survival Guide to Making Money and Keeping It

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Mike Carruthers:
Credit is a lot harder to get than it used to be and a lot of it has to do with your credit score.

Fred Rewey:
Well, there’s basically 6 things that go into your credit score, it’s the length of your credit history (how long you’ve had it) it’s the amount that you owe against the total available credit.
 

Fred Rewey, author of the book Winning the Cash Flow War... 

It’s the type of credit you have as far as some are Visa’s; some might be a car loan or a mortgage. It’s how many new accounts you have, how many things you’ve opened recently or how many inquiries there have been recently. And then it’s also obviously your payment history, you’re looking for somebody who owes less than 30% of what their available balance is.

Diversity also helps; you want to show different kinds of credit.

You know if you’re loaded with 12 Visa’s or 12 MasterCard’s that’s not as good as saying, “Well I’ve got home loan, and a handful of Visas and a store card.” And then also trying to avoid some of the things people do where they walk into a store and say, “Well I’ll go ahead and apply for this credit card because I’m going to get 10% off of this purchase.” Well, that could ding your credit, you know, 10-15 points if you have too many of them.

This is important because lenders just aren’t as forgiving as they used to be.

If a creditor says 720 is the number, then 718 isn’t close enough, it’s not 720. So the difference you know, could be on a car loan if you finance a car loan for say 3 years it could be the difference of paying 6-7 hundred more dollars – because you’re just not going to get the best rates. 

To hear the complete unedited interview, click here