Having a good credit score can be incredibly important to a healthy financial life, but the ways in which people can achieve that goal are often elusive. For that reason, taking the time to familiarize oneself with having a strong score could go a long way toward actually getting to that point.
The most important thing people will have to keep in mind about their score is that it is simply based upon the concept of how likely they are to pay their bills on time and in full every month. The higher their number, the smaller the risk that they'll miss a payment. For that reason, the single biggest factor that goes into making up a rating is how often people have paid their bills in the recent past, according to Consumer Reports. In some cases, even after months of paying every bill on time, one missed deadline can result in losing as much as 100 points from a score.
Of course, most people are aware of the fact that missing a payment can cause not only credit pain, but also financial difficulties thanks to penalty fees and interest rates, the report said. Thus, many already do all in their power to make sure they're meeting their deadlines.
What else can happen?
Therefore, it might be wise for people to focus on repairing other aspects of their scores that may be damaging, the report said. The most important of these is finding out whether they owe too much on their credit cards; the general rule of thumb is that if they owe more than 30 percent of all their combined credit limits, they're going to see their scores start coming down. This is also true if they don't have a lengthy credit history, have opened new accounts in recent months, or if they don't have a variety of accounts in their names. However, these latter three conditions are ones over which they will likely have a little bit less control.
Beyond that, though, it might also be wise for consumers to start thinking about the ways in which an alternative credit score, such as PRBC, might be able to help them as well. These often take into account things that go beyond their handling of credit specifically – such as how they handle paying their other bills – that could serve to improve their scores and put them in a better financial position going forward.