How to Establish AAA Credit

Good credit allows you to qualify for many different loan products, generally higher limits than lower credit borrowers, and with the best interest rates available on credit products. Getting a credit score to the 700s and 800s takes time and a bit of foresight in the type of credit accounts that you are establishing as you build your credit file.

Instructions

1

Diversify your credit accounts. Part of your credit score is calculated by the type of credit accounts you have reporting on your credit report. Credit cards, store cards, mortgages, car loans and installation loans all count as different types of accounts for credit scoring.

2

Make on-time payments with all accounts. On-time payments made consistently establish your credit-worthiness. While you do not get a large boost all at once for on-time payments, as your credit accounts age and your payment history grows, you'll see score increases. A missed payment can make your credit score plummet. Credit accounts are not marked as late until you are over 30 days late with a payment.

3

Do not apply for more credit accounts than you need. Another significant factor in credit scoring is average account age. If you consistently apply for new credit cards, you drive the average age of your accounts down. As this is one factor that takes a significant amount of time to increase, you'll want to limit your credit applications. Each credit application also puts a credit inquiry on your report when the company checks your credit. Inquiries have a small negative effect on your report, but if you have a large amount of inquiries the decrease may be more significant.

4

Pay down revolving debt balances. Revolving debt balances are from credit card and store card balances. The higher the amount of revolving debt compared to your overall revolving limits, the higher your credit utilization is. A high credit utilization will get you denied for new credit and brings down your credit score.