Christian Widhalm, CEO of Bloom Credit, joins TheStreet to share some tips for increasing your credit score.
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00:00All right, let's get down to the practicalities.
00:02What are your best tips for someone increasing
00:06their credit score?
00:08So credit scores are really interesting.
00:10There's two main credit scores that are out there.
00:14One, which is kind of the godfather of them,
00:17is FICO, right, the Fair Isaac.
00:19The other is Vantage Score.
00:21So there's two that are typically out there
00:23that people will see.
00:24They both are typically out of the 850 range
00:26where they kind of cap out.
00:27So if someone has an 800 credit score
00:29that's deemed like excellent, right,
00:30you're very, you know, super prime.
00:32The reality is is that those formulas
00:35live and reside within black boxes, right,
00:38where it's very hard to actually go
00:40and tell somebody exactly what the impact
00:42of their credit score is gonna be based upon activity.
00:46What I can tell you is that those scores
00:49typically factor in certain aspects
00:52of your overall credit profile when generating a score.
00:56The heaviest one, I think at like 35%,
00:58is positive repayment history.
01:01Have you actually been paying your bills on time
01:02and not being late, right?
01:04The other one is credit utilization.
01:05So those, I think, combine to around 70%
01:07of actually the weight of what's in the score.
01:10And credit utilization, I have a $10,000 credit line
01:15on my credit card, but I have $9,000 in balance.
01:18That's a 90% utilization, right?
01:19That's considered high.
01:21That would do something to actually
01:22potentially lower someone's credit score.
01:24So one is to open up credit products, right?
01:28But be responsible with opening up credit products.
01:30Make sure you're actually controlling the utilization rate.
01:33Make sure you're not actually applying
01:34for too many products at once,
01:36because those inquiries that ultimately
01:38hit on your credit report can also potentially deem you in.
01:42But the other is to start taking advantage
01:45of new types of credit building products
01:47that are emerging in the market
01:49that really take other types of data
01:51that we talked about, checking account data,
01:52your rent, your telco payments,
01:54and your utilities payments.
01:55Those can be converted into real trade lines,
01:57and trade lines is how they're showing up
02:00on your credit report, and they have real score impact.
02:03So there's multiple solutions or steps that are out there.
02:07Consumers just need to be aware of them all.