18 April 2008

Improve your beacon score – Part 2

Earlier this week, we talked about making your payments on time and keeping your balances at or below 75% of the limit. Those two items make up 65% of your beacon score. Let’s discuss the other 35%.

How long is your credit history? Don’t cancel your oldest card just because the rate is a percentage point higher than a ‘new card on the block’. Credit grantors like to see established credit. Flipping from one card to another when a special is offered will not benefit your beacon score. About 15% of your score is based on how established you are in the wonderful world of credit.

Credit Enquiries makes up 10% of your score. Numerous credit applications in the last 12 months is not a good thing! This is another reason why it’s a good idea to use a mortgage broker. One credit bureau pull by a broker takes care of all lenders.

Types of Credit rounds out the final 10% of your score. Having a variety of types of credit is looked upon favourably by lenders. Types of credit include credit cards, personal loans and Lines of Credit. However, it’s not recommended to take out a personal loan, for example, simply because you don’t have one already.

Guest post by Ken Wiebe, Mortgage Broker. Click here to contact Ken.