And those first of all, they disappear after a certain amount of time. So credit inquiries make up 10% of your credit score. What can I know this question comes up a lot, so IвЂ™m going to have you answer it вЂњsoft hits and hard hitsвЂњ can you describe the difference between them?Д«rian Davis: Sure. Older is better.Дeni Supplee: And what IвЂ™m going to ask credit inquiries. So the average age of your accounts plays a role in your credit. Older accounts mean that you have a more established credit history, whereas if you just opened an account last month, you donвЂ™t have a whole lot of credit history to speak of. The average age of your accounts accounts for 15% of your credit score. The next largest factor that impacts your credit scores is the length of credit history. You want to keep your balances below that. So you really thatвЂ™s a magic number with the credit bureaus is 30% credit usage. Anything under a 30% usage ratio is pretty good. And thatвЂ™s a 25%usage ratio, which is OK. So if you have a credit limit of $1.000,00 on a credit card and you use 250, you have a credit balance of $250,00 a month. So itвЂ™s basically the ratio of credit that you have, like the total credit limit you have versus the amount theocracy you use, and itвЂ™s calculated as a percentage. And this is particularly impactful for rotating credit lines like credit cards.Дeni Supplee: So and thatвЂ™s per credit card.Д«rian Davis : Yeah. Now, the next largest factor that impacts your credit score is the total amount of debt that you have versus your total credit limit. So your payment history accounts for 53% of your credit score. If you make your payments on time every month, that goes a long way in helping you to establish better credit. So if you make your payments late every month or forever, for that matter, youвЂ™re going to have bad credit. So your payment history accounts for the largest proportion of your credit score. So the way that FICO calculates these scores, hereвЂ™s how it breaks down. So a credit score in the mid to upper 600 is, you know, averaged a good Anything below 650 is fair, below 600 is bad, and then above 750 is great credit. And itвЂ™s rare to see credit scores above 800 as well. In practice, you almost never see credit scores below 500.

And these are used by most of the lenders out there and credit card companies. So there are a few different types of credit score out there, but the most commonly used as FICO, which is created by the Fair Isaac Corporation, thatвЂ™s the term FICO. Brian, tell us a little bit about FICO scores.Д«rian Davis : Sure. So without further ado, and because weвЂ™re a few minutes late, letвЂ™s jump right in. And weвЂ™re going to talk about 5 ways to build credit, which is important, especially when you want to invest in real estate. Today weвЂ™re keeping someone in line with that subject. Last week we talked about unsecured business credit lines and I know quite a few of you were attending the webinar on the Concierge Credit Service. Deni Supplee: Well, hi, everybody, and welcome.Дeni Supplee: WeвЂ™re a few minutes late because of good old technology.

Ways to build credit