7 Tips on How to Get a Perfect Credit Score ...

If you want to learn how to get a perfect credit score, tackling your credit card bills is the first step. The amount you owe creditors makes up about 30% of your credit score, according to Myfico.com. Therefore, the more you owe your creditors, the lower your credit score. To pay off your debt, start paying more than your minimums. In addition, stop adding new charges to your cards. And if you use your card, pay off the balance in full each month.

Since the amount you owe makes up a large percentage of your credit score, try and pay cash for as many things as possible. Understandably, you may not be able to pay cash for a home or pay for college tuition out-of-pocket. But if you can save up for other things, such as a car, you can avoid a car loan, which keeps your debt to income ratio within a reasonable range.

Having a mixture of credit accounts is another way to add points to your credit score. This is much easier than you may think. For example, you don't want to have just one or two types of credit. To diversify, you might have a credit card for emergencies and a mortgage loan that you pay off over thirty years. If you're unable to pay cash for a car, you might add an auto loan into the mix, and perhaps a student loan.

Cosigning a loan not only increases your debt to income ratio, but there's always a chance that the primary borrower will default on the loan. This action can lower your credit score and kill your chances of achieving a perfect score. As a rule of thumb, only cosign a loan if you can afford to take over payments if the person defaults. If you question your ability, don't put your name or credit on the line.

The length of your credit history also influences your credit score. For that matter, someone with a long history of credit will probably have a higher score than someone getting their first credit card. Therefore, you need to build credit at an early age, perhaps in your late teens or early 20s. To get started, talk to your bank about a secured credit card, or apply for a retail charge card, which is easier to get approved for with no credit history.

The timeliness of your payments makes up 35% of your credit score, according to Myfico.com. Therefore, building a perfect credit score will require that you pay all of your bills on time every month. This includes your credit cards, auto loans, mortgages and student loans. In addition, make sure you pay utility bills on time. These creditors may not report to the bureaus on a monthly basis, but they will report delinquencies, which can lower your FICO score.

If you have negative information on your credit report, such as a foreclosure, a bankruptcy or a repossession, only time can make up for these credit mishaps. Negative information can stay on your credit report for up to 7 to 10 years. However, if you improve your credit habits, you can rebuild your credit in about 2 to 3 years. But unfortunately, you may not achieve a perfect score until a negative item falls off your credit report.

It will take time, patience and determination, but you can achieve a stellar rating. Are you happy with your credit score? If not, how do you plan to increase your rating?