Understanding Your 315 Credit Score

A 315 credit score falls towards the bottom of the “bad credit” tier. Scores between 300 and 579 make up the “bad credit score” range.

Borrowers with bad credit may only have subprime lending products available, which should be used with caution.

Bad credit consumers can improve their scores by understanding how credit history works, paying bills on time, lowering debt, and avoiding new credit applications.

In order to improve your credit scores, you’ll have to understand how they work. You can find your current credit score on your most recent credit report, which is an official record containing your financial history. This record contains information regarding the following topics:

• Payment history – how often you make on-time payments toward your bills and debts

• Amounts owed – how much money you owe in debts and other financial obligations

• Length of credit history – how long you have had credit accounts open in your name

• Credit mix – the different types of financial accounts you have (investments, credit cards, mortgages, loans, etc.)

• New credit – how often you have applied for new credit cards or loans within the past few months

All your reported accounts and financial activity regarding each of these categories can be found on your credit report. The more positive activity and accounts you have on your credit report, the more your credit score will benefit.

If you have a handle on your monthly payments, you will want to then focus on repaying your overall balances. Repaying your balances will work to improve your debt-to-income ratio. This ratio refers to the amount of money you owe in debts and balances compared to how much money you make from your job or other income. Typically, you will want your income to outweigh your debts.

If your debts heavily outweigh your income, you may want to think about debt consolidation or other debt repayment methods. You can also try simply paying a little more than your minimum amount due on each debt payment to bring down your balances faster.

While it’s important to keep all aspects of your credit report in mind when trying to improve your credit score, your payment history is going to be the most important. Making timely payments on your bills, loans, and other financial obligations accounts for 35% of your overall credit score. But, although payment history can have the biggest impact on credit score improvement, it can also be the biggest obstacle in holding you back from improving your score. Just one late payment on your credit file has the potential to bring your credit score down for up to seven years! And so, it’s crucial that you make all your due payments on time.

To help ensure you maintain a pristine payment history, think about signing up for automatic payments, also called auto-pay. Just make sure you have enough money in your checking account to avoid going into the negative!

Try not to apply for new loans or credit cards for a while. Although new credit inquiries only account for a small percentage of your credit score, they can play a major role in the overall health of your credit history. By limiting your new credit inquiries and applications, you will not only save yourself from getting hit with a hard credit check, but you will also avoid accumulating more debt to pay off.

However, while you should avoid submitting applications for multiple credit accounts, that doesn’t mean you need to cancel any existing accounts you already have in your name. In fact, you could end up lowering your credit score by getting rid of existing savings or credit card accounts you have in good standing.

Get a personalized plan to improve your score today.