Expert: David McArthur - 1/2/2009

Question
Is there anything published and/or on the web (books, articles, blogs, daily e-mail tips, etc.) that breaks down all potential negative effects and something to the effect of positive effects on one's credit and puts it into a simple, user-friendly list? It seems everything I find is extremely convoluted and full of hearsay. Is it perhaps that the world of credit reporting is, in fact, quite convoluted, thus making it impossible to state these items so plainly? I would LOVE to find something broken down like this:

POSITIVE EFFECTS:
< x-number open accounts
Debt ratio < x%
Paying x% greater than monthly minimum payment
x-number of cards with y-number history

NEGATIVE EFFECTS:
> x-number open accounts
Debt ration >x%
x-number of cards with y-number history

etc., etc...

Answer
I like your question Yvette.  It shows thought. Questions like these are what led me to starting a credit repair company.  I'll address the points you have listed:

The best scores are achieved with 4-5 credit cards mixed with installment loans as well.  The cards and loans need to be from a major bank or lender.

The best utilization ratio on your revolving credit lines is 5% and it tiers up to 50%.  Once you hit 50% you have done maximum damage to that portion of your score.  Debt to income ratio does not impact your score.

The amount you pay is not as important as the balance you carry.

The length of your history is 15% of your score.  No way to impact it other than not canceling your current accounts.

You should go to myfico.com.  They created the modern credit score and have some aids on understanding it.  If you currently have poor credit and are looking to increase your score got to:

www.financialscoringsolutions.com

Dave