Where Does Your City Rank on the Regional Mortgage Debt Map?

It is no secret that the price tag for owning a home varies wildly in different parts of the country. Even within the regional patterns, neighboring states have their own housing markets and average prices in the cities within those states can range from the highest to the lowest extreme within 100 miles of each other.

Credit Karma examined at the average mortgage debt for individuals from our 60 million membership who visited our site in the last year to find the cities in each region that carry the greatest and smallest debt burden for owning the title to home sweet home*. Mortgage size and affordability can depend on a number of factors, including size of down payment, interest rate, how much principal has been paid off, income opportunities and living expenses. They are, however an indication of what prospective homeowners can expect from the market. Here is what we found:

West

The region of the United States with the largest mortgage on average is the West with Hawaii topping the list at $337,445 (followed closely by California with $329,149). Digging deeper, there are some stark differences between locations that are 100 miles or less apart. Those considering a move to California could adjust their sights 100 miles east from star-studded Beverly Hills, the city with the highest average mortgage debt in the Golden State of almost a million dollars, to California City, which was carved out of the Mojave Desert with a vision to create the next big urban hub and is now the place with the third-lowest average mortgage debt in the state at $144,000.

Even in the state with the lowest average mortgage debt in the region, New Mexico, a wide gap exists between the average mortgage debt in the capital of Santa Fe (more than $215,000) and the Albuquerque suburb of Belen (just shy of $120,000), the third-lowest average mortgage rate in the state almost 100 miles away.

Here are the state-by-state breakdowns:


Midwest

While the gap between average mortgage debt in the least and most expensive states in the Midwest are not as extreme as in the Western Region, homeowners will carry almost $60,000 more in loans on average in Illinois, North Dakota and Minnesota than in Indiana, Ohio and Michigan. Again, where in the state you live can made a difference as well. The average mortgage in the Chicago enclave of Highland Park is above $400,000 while a few hours away, mortgages in West Frankfort (home of the annual Old King Coal festival) are under $65,000 on average.

Here are the state-by-state breakdowns:


 


South

Mortgage debt levels in Maryland and Virginia are, on average, twice that of Missouri (the state with the lowest average mortgage debt in the country), Arkansas and West Virginia, but look closer and homeowners in some cities in Delaware may have more in common with homeowners in West Virginia when it comes to writing a monthly check for a piece of antebellum real estate than the averages might indicate. For instance, the average homeowner in Coral Gables, Florida (a planned community that is home to the University of Miami), carries a loan five-and-a-half times larger than the $80,000 paid by the average mortgage holder in Interlachen (a former tourist spot named after the city in Switzerland).

Here are the state-by-state breakdowns:


Northeast

While the average mortgages in the Northeast are higher than in the Midwest or the South, there are still pockets where loans are smaller. The New York City suburb of Scarsdale and its average $481,000 mortgage is eight times higher than the $60,000 average mortgage for homeowners in Dunkirk, the westernmost city in the state hugging Lake Erie. And while Pennsylvania is, on average, more affordable than New Jersey, the Philadelphia suburb of Newtown carries an average mortgage of more than $340,000, on par with Montclair, a township overlooking the New York City skyline.

Here are the state-by-state breakdowns:


 

 

 

*Methodology

Average mortgage debt for Credit Karma members who logged in between May of 2015 and May of 2016. All data was aggregated and anonymized.

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Everything You Thought You Knew About How Millennials Manage Money May Be Wrong

Credit Karma Study Finds 18-34 Year Olds are Looking for Stable, Well-Paying Jobs and Focused on Financial Fitness

A new survey by Credit Karma finds that contrary to popular opinion, young people really are interested in “adulting” in pretty traditional ways. They are getting married and buying homes and cars in large numbers. Urban, suburban and rural 18-34 year-olds are starting families and using credit cards. They are also loyal to their jobs as long as their employers pay them fairly. They collectively carry more student debt than any generation before, but that is not stopping them from moving forward with their lives and saving for the future.

How do we know? Credit Karma, working with Qualtrics, surveyed over 1,000 people between the ages of 18 and 34 on their plans for everything from marriage and money to cars and kids. While the results shattered many of the negative stereotypes that have been perpetuated in anecdotes about young people putting off the responsibilities of adulthood in favor of short term relationships and jobs, living for the moment and putting off retirement planning, we were not surprised. Millennials across the country have been an active segment of our more than 60 million members who use Credit Karma tools to monitor their credit, find better credit and loan offers and make data-based financial decisions.
Here are some of the things you may have thought about millennials that may not be true:

Myth: Millennials are driven professionally by emotions and mission rather than money and have no sense of loyalty in the workplace.

Fact: Almost two-thirds said that a wage increase or promotion motivated them to change jobs and three-out-of-five planned to stay for longer than three years.

More than half of those surveyed changed jobs for a wage increase and nearly another quarter changed jobs for a promotion. The desire to try new things only accounted for one-out-of-four resignation letters.

  • 70% of 29-34 year-olds with jobs said that on average they had stayed four years or longer at each job.
  • 63% of the youngest working millennials (between the ages of 18 and 28) said they anticipated working for their current employer for four or more years
    • 25% said they planned to stay put for eight or more years.

These workers were not as convinced about the loyalty of their employers. Over three quarters (78%) said they were concerned about job security, with 45% saying they were extremely or somewhat concerned. Only 22% said they were not at all concerned about their job security.

Myth: Millennials make poor financial choices.

Fact: The majority of millennials are opening credit cards and building positive credit histories early.

Millennials are taking the step of opening credit cards just as generations before. In fact, almost 30% of Credit Karma members between the ages of 18 and 34 who logged into their accounts between May 2015 and April 2016 have already moved into the good or excellent score range of 700 or higher.

  • A majority (62%) of millennials surveyed have at least one open credit card.
  • Of the minority who do not have a credit card, 48% cited an aversion to debt as their number one reason for abstaining.
  • Only 7% of those without cards “do not see the need for credit cards,” and only 2.3% are against using them at all.

Myth: Millennials are living for the moment and not worried about the future.
Fact: The majority of young people are
saving for retirement and have an emergency fund already; they are not sure that Social Security will be waiting for them and they are still reeling from the impact of the 2008 Recession.

More than half of all millennials are currently saving for retirement, with the overwhelming majority of those starting 401(k)s before their 28th birthday. Many said they started saving on their own and many more said they were not sure they could rely on Social Security as a retirement option.

  • Of the 52% of millennials saving for retirement, 89% started at 28 or younger. (59% 22-28, 29.8% were 21 or younger.
  • Almost half (48%) said they started saving through their employer.
  • 31% of millennials do not have any type of emergency fund.
  • More than half of all millennials surveyed (62%) were not confident that Social Security would be there for them when they retire.

Short-term planning was also a priority for this demographic. A majority (69%) said they had an emergency fund, with 36% saying this savings topped $1,000.

As the generation that came of spending age during the 2008 financial crisis, the economy had a major impact on how they viewed debt and savings. Almost 75% of millennials cite the 2008 financial crisis as moderately, very or extremely influential in shaping their beliefs about personal finance management.

  • 26.6% moderately
  • 26.8% very
  • 21.5% extremely
  • Older millennials were even more likely to say it impacted their financial behavior.

Myth: Student loan debt is holding millennials back from achieving traditional milestones.

Fact: Millennials are opening credit cards and buying houses regardless of student loan status.

  • Less than 20 percent of millennials surveyed who do not have any open credit cards cited their student debt load as impacting their decision to take out credit.
  • In fact, nearly 60% of millennials without a credit card didn’t even have student debt!
  • Only 4% said student loans were holding them back from owning a home.

Methodology: Credit Karma, in partnership with Qualtrics, surveyed 1,016 18-34 year-olds between May 25 and June 3 to ask their opinions on 33 questions. All data was aggregated and anonymized.

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Credit Karma Takes Pride in Diverse Culture

Photo credit: Jonathan Garza

A community outreach initiative that started modestly two months ago grew into an outpouring of support for the LGBTQI community the last weekend in June as almost 200 Credit Karma employees, family and friends marched for the first time ever in the San Francisco Pride Parade for Racial and Economic Justice. Employees from all departments along with senior executives marched in the parade, accompanied by DJ Justin James under 75 3-ft-diameter balloons, handing out rainbow slap bracelets and showing their support for the community.

Plans for the march were well underway by the time reports of the Orlando nightclub shooting started showing up in news feeds. Shirts had already been ordered and a promotional video had been sent internally to let employees know about the opportunity that would be passing right outside the company’s doors on Market Street. After the shooting, CEO Ken Lin sent a note to the financial technology company’s more than 400 employees sharing their grief and encouraging participation. Soon the sign-up sheet exploded and black arm bands were added to the clothing.

“We have a warm, supportive, inclusive culture and this is just one example of how diversity is embraced every day by all of the employees,” said Shelley Newhouse, brand manager and co-organizer.

Event Organizers Shelley Newhouse and Jonathan Garza

Credit Karma is not new to the cause. One of the founders from when the company was established in 2007 is a member of the LBGTQI community. The company also sponsored a brand team to travel to LA for their Pride celebration. “Diversity is in our DNA,” explained Ragini Parmar, vice president of Talent Operations. “We inspire a culture of diversity, creativity and innovation at Credit Karma and place a strong emphasis on diversity in our hiring practices. Our work fosters learning and personal growth for all employees,” she added.

“Empowerment is who we are as a culture,” concluded Jonathan Garza, brand manager and fellow co-organizer.  “We come together for the right reasons and have fun doing it.”

Photo Credit: Julia Fu

 

 

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Concern for Environment Cuts Across Credit Score Bands

It turns out having clean air and water is something almost everyone can agree is important. A Credit Karma survey in late March, 2016 of a cross section of its more than 60 million members to determine what issues they considered priorities in the presidential election found that regardless of age or credit score* the majority ranked the environment as very or extremely important and some segments found it even more important than others. Millennials marked the environment as very or extremely important an average of 9% more that those 65 and older and those with credit scores in the Fair range did the same 6% more of the time than those who had credit scores that fell in the Good or Excellent range.

Here are some of the highlights:

  • The importance of the environment was a priority for a majority of Credit Karma members regardless of their credit score, with younger respondents prioritizing the issue most.
  • Nearly two-thirds of Credit Karma members (64%) said the environment is either extremely important or very important.
  • Credit Karma members with credit scores at or over 640 and under 700 gave the most emphasis to the environment. Over two-thirds of these respondents (68%) ranked the environment as very important or extremely important.
  • Nearly seven out of ten millennials (69%) ranked the environment as very important or extremely important.

It turned out that particularly when it comes to the importance of things like Social Security and healthcare, people were actually more in agreement than headlines may suggest. Read all of the results here:

Methodology

From late March to early April, Credit Karma surveyed 1,018 Credit Karma members who logged into their accounts and asked them to identify the political issues they were most likely to prioritize. Members ranked the issues on a five-point scale from “not at all important” to “extremely important.” We identified the top issues by calculating the percentage of responses in the two highest categories on the scale (“very important” and “extremely important”) and then ranking the issues by the percentage of responses in those two categories. We compared the credit scores of the respondents in aggregate and found that an individual’s credit score correlates with what issues they say matter to them.

*Credit score data is based on TransUnion VantageScore 3.0 credit scores pulled by Credit Karma members from late March to early April 2016. All data was aggregated and anonymized. Aggregate level results have a maximum 3.07% margin of error at a 95% confidence level. The survey was conducted to reflect the opinions of the U.S. demographic by percentage of participants in particular age groups in proportion to the most recent Census report. Research was conducted using the Qualtrics Insights platform.

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Everything You Thought You Knew About Millennials May Be Wrong

Credit Karma Study Finds 18-34 Year Olds Value American Dream

 

A new survey by Credit Karma finds that contrary to trending criticisms, young people really are interested in “adulting” in pretty traditional ways. They are getting married and buying homes and cars in large numbers. Urban, suburban and rural 18-34 year-olds are starting families and using credit cards. They collectively carry more student debt than any generation before, but that is not stopping them from moving forward with their lives and saving for the future.

How do we know? Credit Karma, working with Qualtrics, surveyed over 1,000 people between the ages of 18 and 34 on their plans for everything from marriage and money to cars and kids. While the results shattered many of the negative stereotypes that have been perpetuated in anecdotes about young people putting off the responsibilities of adulthood in favor of short term relationships and jobs, living for the moment and putting off retirement planning, we were not surprised. Millennials across the country have been an active segment of our more than 60 million members who use Credit Karma tools to monitor their credit, find better credit and loan offers and make data-based financial decisions. From Los Angeles, California to Blue Ridge, Georgia and Cambridge, Massachusetts, millennials are following in the footsteps of generations before them.

What is a myth and what is the truth?

Myth: Millennials have less of a desire than previous generations to get married and are having children later in life.

Fact: Four out of five millennials say they want to get married and the majority that have married did so in their 20s.

 

As illustrated by the massive popularity of matchmaking shows, young people are overwhelmingly committed to finding that special someone, and most of them plan to make it official one day. Of those planning a wedding, most are setting the date for while they are still in their 20s, according to the survey. They also plan to start families with three-fourths of millennials surveyed already joining the ranks of parenthood or planning on it.

Survey findings:

  • Almost half (46%) of millennials are already married or living with a partner
  • Over four out of five (83%) millennials who are unmarried hope to get married one day
  • The biggest chunk of married millennials tied the knot between the ages of 22 and 26 (43%)
  • Over two out of five (42%) millennials already have a child; and another third plan to start a family at some point
  • A previous marriage attitudes survey conducted by Credit Karma comparing Baby Boomers to millennials found that when it comes to marriage the two generations have similar approaches to discussing and managing finances.

Myth: Urban millennials are not as interested in getting married as suburban or rural millennials.

Fact: Millennials all over the country say they want to get married in overwhelming numbers.

There was little statistical difference between urban, rural and suburban percentages of married millennials, those who want to get married, those living together and the age of marriage.

  • 85% of unmarried urban millennials hope to get married. Similarly, 82% of suburban and 83% of rural millennials hope to tie the knot
  • Over one third (34%) of urban millennials are married, while 36% of rural millennials are married
  • About one in ten urban and rural millennials (11% and 12%, respectively) are unmarried but living with a partner
  • Only 22% percent of both rural and urban married millennials were married between ages 16-22.

 

Myth: Millennials don’t care about owning a home.

Fact: Millennials aspire to own homes, but are hindered by affordability

Despite reports of waves of millennials returning to the nest, a significant majority are out on their own.  Over half of those surveyed (58%) were homeowners who bought their home before their 26th birthday. Those who had not taken title yet to a piece of the American Dream overwhelmingly (88%) said they would like to take that milestone step. Those who did not see homeownership in their future cited the expense and difficulty of qualifying for a loan as stumbling blocks, a statistic that makes managing credit even more important for young people.

  • Millennials are equally split between renting and owning
  • A large majority of millennials (nearly 88%) who do not own a home today hope to purchase a home in the future
  • 17 percent of millennials who own a home had purchased one in their early to mid-20s
  • Of those that do not own a home, the majority confess that buying a home is too expensive; fear of debt ranks as the number two hindrance
  • Younger millennials who said they did not want to own a home most often said they didn’t see the benefit while older millennials most often said that they thought buying a home was too expensive
  • Less than 5% said student loans were the reason they did not want to buy a home.

Read more results of the survey on how millennials manage money here.

Methodology: Credit Karma, in partnership with Qualtrics, surveyed 1,016 18-34 year-olds between May 25 and June 3 to ask their opinions on 33 questions. All data was aggregated and anonymized.

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Survey Shows Concerns with College Debt Fade with Time, Credit Score

With $1.27 trillion in outstanding student debt reported last year by the Federal Reserve, this mounting drag on the economy has become a highly charged issue with as many solutions as there have been presidential candidates.

Credit Karma surveyed over 1,000 of its more than 50 million members, asking them to rate 14 issues on a five-point scale ranging from “not at all important” to “extremely important”. We compared the credit scores* of the respondents in aggregate and found that an individual’s credit score can say a lot about what issues matter to them and how that might impact their vote in the presidential election. You can read the full results here.

Here are some of the highlights from the survey on the issue of cost of higher education:

 

  • For those with credit scores under 640, the cost of higher education was the fourth most important issue behind healthcare, Social Security, taxes and unemployment. Nearly seven out of ten respondents with credit scores in that range (69%) ranked the cost of higher education as either very important or extremely important.
  • Respondents with credit scores over 750, however, ranked nine other issues as more important. Only 52% of respondents with the highest credit scores said it was very important or extremely important.
  • Three out of four millennials said the cost of higher education was very important or extremely important, compared to fewer than half of respondents over 65.

Methodology: From late March to early April, Credit Karma surveyed 1,018 Credit Karma members who logged into their accounts and asked them to identify the political issues they were most likely to prioritize. Members ranked the issues on a five-point scale from “not at all important” to “extremely important.” We identified the top issues by calculating the percentage of responses in the two highest categories on the scale (“very important” and “extremely important”) and then ranking the issues by the percentage of responses in those two categories.

*Credit score data is based on TransUnion VantageScore 3.0 credit scores pulled by Credit Karma members from late March to early April 2016. All data was aggregated and anonymized. Aggregate level results have a maximum 3.07% margin of error at a 95% confidence level. The survey was conducted to reflect the opinions of the U.S. demographic by percentage of participants in particular age groups in proportion to the most recent Census report. Research was conducted using the Qualtrics Insights platform.

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Ways To Raise Your Credit Score

A recent survey from the national basis for credit Counseling indicates that other humans could be embarrassed to confess their credit ratings (30%) than their weight (12%).

Even as crash diets don’t typically work and can be bad, it’s miles feasible to alternate your credit score enough fast. But simply as with weight reduction, “quickly” is a relative time period. Seeing any development may want to take 30 to 60 days, consistent with Liz Weston, private finance columnist and author of Your credit score, Your money & What’s At Stake.

But nothing will alternate at all in case you only sit down there on the sofa, consuming Cheetos and charging items on the home buying community. So get shifting!

The primary thing to do is get a duplicate of your credit score record from AnnualCreditReport.Com. The 3 essential credit score reporting bureaus ought to give you one free copy per year, so plan to order one each four months.

Then use one or extra of the following pointers to reinforce that 3-digit wide variety that has increasing electricity over our regular lives.

1.Dispute mistakes. Errors appear. You may dispute errors online thru Equifax, Experian andTransUnion. After you’ve constant any foul-ups, you might attempt to…

2.Negotiate. You may deny which you stopped paying a credit score card invoice while you were unemployed closing yr. But you could ask creditors to “erase” that debt or any account that went to series. Write a letter supplying to pay the final balance if the creditor will then file the account as “paid as agreed” or maybe even cast off it altogether. (be aware: Get the lender to agree in writing before you are making the fee.)

you might additionally be capable of asking for an “accurate-will adjustment.” assume you had been an entirely accurate Visa V +1.30% customer till that length of unemployment, whilst you made a late price or two – which now show up on your credit record. Write a letter to Visa emphasizing your previous right records and ask that the oopsie be eliminated from the credit report. It is able to occur. And so much time as you’re analyzing the document, you want to…

3. Take a look at your limits. Make certain your reported credit limits are present day vs. Lower than they really are. You don’t desire it to appear as although you’re maxing out the plastic every month. If the cardboard company forgot to mention your newly pumped-up credit score limit, request that this is finished.

4.Get a credit score card. Having one or two portions of plastic will do properly matters on your rating – if you don’t rate too much and in case you pay your payments on time. In other words, be an accountable user of credit score.

Can’t get a traditional card? Try for a secured credit score card, taking care to select one that reports to all three primary credit bureaus. And if you may get a secured card, you might ask tO

5. Become a certified user. This means convincing a relative or buddy to be brought to his or her current credit card account. In case you’ve had a checkered financial history, don’t be surprised in case you listen to the word “no” plenty. However you would possibly luck out, specifically in case you’re a young character who has no records of terrible credit score use.

Provide to position an agreement in writing declaring how plenty you could spend and how you will get your percentage of the bill to the cardholder. Then “do your element and use the cardboard responsibly,” says Beverly Harzog, author of Confessions of a credit Junkie. In other phrases, don’t buy greater than you can manage to pay for and don’t go away your co-signer placing while the bill is due. The summit is to study to use credit score correctly.

6.Under-use your playing cards. Sure, we did just inform you to get credit score by using any means viable. But don’t whip out the plastic to pay for the whole thing. The “credit usage ratio” ought to be no greater than 30% and preferably even much less. Harzog says that a ten% credit utilization rate will “maximize this a part of your FICO score.”

for example, suppose your credit card has a $1,500 restriction and also you routinely fee a grand a month. It doesn’t matter if you pay all of it off before it’s due. What topics is the credit score bureaus assume “Curtis is using two-thirds of his credit! What a spendthrift!” And if you’re a cash-free sort of guy? Then attempt to

7.Enhance your credit limit. Ask your creditors to increase your restriction, i.E. Making that MasterCard correct for up to $3,000. Be careful with this one, even though: it works simplest if you could consider yourself now not to increase your spending conduct accordingly. In any other case you’ll be right again to the usage of sixty-six% of your credit each month and how will that appearance?

8. Don’t close any playing cards. Canceling a credit score card will reason your available credit to drop, which doesn’t look properly to a bureau. One manner to keep a card active is to apply it for a recurring charge together with an application invoice. There’s room for that in your budget, proper?

9. Mix it up. The use of an unusual type of credit score could make for a modest boost to your score. For instance, you may take out a small private loan from the credit score union or purchase a bit of fixture or equipment on installment (however most active in case you’re 100% confident you can and could meet the charge time table).

10.Pay your payments on time. Severely. Your fee history – together with the ones you pay late or pass altogether – makes up a whopping 35% of your FICO rating. In case you’re absent-minded or merely overwhelmed (hello, parents of younger kids!), then for heaven’s sake, automate your bills. Even higher than paying on time is to…

11.Pay your payments twice a month. The usage of an excessive amount of-of your credit restrict at any given second doesn’t look top. Suppose your restriction is $three,000 and a month’s well worth of havoc (vehicle repair, medical doctor payments, aircraft ticket for a youngster to get to college) means you’ve charged up $2,900. Positive, you propose to pay incomplete by means of the 18th of the month – however till then it looks like you’re maxing out yet every other card.

Rather, make one payment just earlier than the announcement final date and 2d one proper before the deadline. The first will probably lessen the balance that the credit bureaus see and the second one makes certain you received pay hobby or a late charge.

Steps to Improve Your Credit in 2015

Steps to Improve Your Credit in 2015

As 2014 winds down, you’re probably thinking about resolutions you could make and aspects of your life you’d like to improve upon in the next year. Maybe you’d like to move into a bigger house or refinance your current mortgage to save a little money. Or maybe you’d like to get a new job or upgrade to a new phone plan. But did you know that all these aspirations could be impacted by the state of your credit health?

Steps to Improve Your Credit in 2015

So maybe your goal for 2015 should be to get your credit in tip-top shape first. After all, having great credit doesn’t just come in handy when you want a new credit card. In addition to the aforementioned situations, it could save you thousands of dollars in interest, as lenders often use your score to determine the rates you’ll pay to borrow.

1. Pull your credit reports.

According to the Consumer Financial Protection Bureau, fewer than one in five Americans check their credit report in any given year. Don’t follow this trend. If you want to begin tackling your credit, your starting point should be your credit report. This important document is used to calculate your credit score, so it’s critical to monitor your report regularly and ensure that it’s updated and accurate. You can get a copy of your report from each of the three credit bureaus – TransUnion, Equifax and Experian – for free every year from AnnualCreditReport.com.

2. Dispute any errors.

Don’t shy away from all the numbers and data on your reports – you’ll need to scrutinize everything carefully and fight any major errors you find. Check out our sample credit report to learn what to look for and how to spot red flags.

After you’ve circled the inaccuracies on your report that you want corrected, it’s time to gather evidence to support your case. Then write a letter detailing what errors you’re fighting, and send everything to the bureaus reporting the faulty information. While the dispute process may not be particularly thrilling or speedy, it’ll be well worth your time if it results in your report more accurately representing your credit history.

3. Identify the factors on your report that need work.

After your credit report is free of errors, it’s time to look at it again – this time to see what you can improve upon. Don’t forget: Your credit score is typically based off the following factors:

  • Percent of on-time payments. Since credit scores are meant to indicate how likely you are to make future payments on time, this factor is typically very important. In fact, just one missed payment could kill your credit score.
  • Open credit card utilization. To calculate your utilization rate, divide your total credit card balances by your total credit card limits. In general, it’s best to keep this percentage as low possible, preferably under 30 percent.
  • Number of derogatory marks. Derogatory marks include negative records such as bankruptcies, foreclosures, accounts in collections, tax liens and civil judgments. These could severely damage your score, as they indicate you’ve had trouble managing credit in the past.
  • Average age of open credit lines. This factor averages the ages of your open credit cards, mortgages, auto loans, student loans and other lines of credit on your report. Lenders like seeing both a lengthy and well-managed credit history.
  • Total number of accounts. A larger number of open credit accounts could impress future lenders, as it shows that others trust you with credit.
  • Total hard credit inquiries. Hard inquiries typically occur when a potential lender checks your score to make a lending decision. A multitude of hard inquiries on your report may send a red flag to creditors that you’re desperate for credit or aren’t able to get approved for other lines of credit.

4. Devise a game plan.

Once you know what aspects of your credit you need to work on, set specific goals. For example, if your percentage of on-time payments is less than perfect, question why this is the case and then figure out how to solve the issue.

If remembering to make payments is the problem, consider enrolling in auto-pay or setting up a monthly text or email alert. If lack of money is the issue, look into other ways to you can make money, or closely track everything you purchase and see where you can cut back. On the other hand, if your utilization rate is the factor that needs work, try making payments more than once a month, asking your lenders for a limit increase or spending less money in general.

Whatever you decide to work on, don’t forget to make your goals specific, as general goals like “I want to improve my credit” are too vague to quantify.

5. Execute (and wait).

Now comes the hard part – carrying out your plan!

As with any goal, you may be more likely to succeed if you find someone to keep you accountable. Instead of updating your social media channels to tell your friends what you did last weekend, try mentioning your plans to improve your credit and ask them to keep tabs on your progress. Or, find a friend who also wants to work on his or her credit, and set up a system in which you check up on each other regularly.

It’s also important to keep in mind that improving your credit health can take a lot of time and patience. As your credit score is based off so many factors, it can fluctuate despite your best efforts to improve it. In addition, factors like your average age of accounts depend on time passing for it to improve.

Lastly, don’t be discouraged. By diligently working toward your goals, your credit health should eventually improve. Good luck and have a happy new year!