Establishing Quality Loans on Your Credit Report

To contact us Click HERE

Some loans are considered more valuable than others, such as a mortgage. This type of loan usually shows that a person is more responsible. The credit scoring system requires a minimum amount of activity on these accounts for revolving – such as a credit card – and installment loans – like a mortgage or an auto loan.

The activity on a mortgage or auto loan is not as critical as a revolving account because you make those payments regardless every month versus a credit card that can be put into a drawer and not used for months and months. In order to keep your credit card accounts active you should use them at least every 6 months so they won’t go unrated or become an inactive account.

You should have some payment activity from both types of loans – it is critical to raising credit scores.

This tip goes back to the Five Factors of Credit Scoring.