Tuesday’s Tip – How to Climb the Credit Ladder

To earn a high credit score on your credit report it’s important to follow a few guidelines.  You need to keep a well balanced credit profile using different types of debt.  Below is the natural progression of credit so it will be easiest to obtain credit in this order.  Regardless of what type of credit you acquire first it’s very important you pay everything on time.  To avoid a late payment from effecting your credit score and appearing on your credit report the payment has to be processed within 30 days of the original due date.

• Keep a few revolving debts (credit cards) with balances below 50% of the maximum available amount.
• Keep one or more installment debts (car loan, motorcyle loan, etc.).
• Keep one mortgage loans (house loan).
• Possibly keep one second mortgage loan (Home Equity Line of Credit or Loan)

If you start small and work your way up the credit ladder you’ll earn the credit score you deserve and have a much easier time getting approved when you’re ready for the bigger things in life.