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Everything you need to know about credit scores

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DETROIT – Many people have had a credit card charge or know someone who has.

Having large credit card debt can seriously damage your credit score.

The average Michigander has $ 5,400 in credit card debt. This in itself is a problem. But what many of us don’t know is that the higher your credit score, the more damage you cause to your future ability to get a loan for important things like a mortgage or a car loan.

An average credit score for a Michigan resident is 706, which is quite good considering that the worst score is 300. A perfect score is 850.

Knowing your credit score is half the battle, says Beverly Harzog, US credit card expert.

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“Credit is intuitive,” Harzog said. “You really have to put in the effort to sit down and learn the basics, and then you can make your credit cards work for you instead of the other way around. “

Equifax, Experian, and Transunion are three credit bureaus that build your credit score by looking at your on-time payment record, credit usage, how long you’ve recently opened new lines of credit, and your debt composition. .

“Four in ten thought that a higher credit card balance would be a higher credit score, and the opposite is, in fact, true,” Harzog said. “You want to keep your ratio below 30%, and he really wants to boost your score quickly and keep it below 10%. “

On-time payments represent 35% of your score. Usage is 30%, the term of credit is 10%, new lines of credit 15%, and your credit mix is ​​10%.

Saying yes to that big box retailer credit card this year can hurt your credit score.

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“I want to warn people that with a retail card sometimes the APR is really high, so you have to take a look,” Harzog said. “Of course, I always say never to wear a scale.”

Harzog has this great advice to get you on your way to eliminating that debt and improving your credit score at the same time. Call your credit card company and ask when they report your information to the credit bureau to make two payments before that date, and you can see your credit score starting to improve.

Read: More financial reports

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