KOHO

If you're using or considering our Credit Building tool to work on your credit score, you're in the right place! 

Our credit scores impact a lot of things in our financial lives. A poor score, or no score at all, can be costly, and be a big headache. Today we are going to dive into a few tips to help you, help the Credit Building tool improve your score! 

First, let's dive into what the number means.

- Credit scores range from 300 - 900
- 300 - 579: Poor
- 580 - 659: Fair
- 660 - 719: Good
- 720 - 779: Very Good
- Above 780: Excellent

When working to improve your credit score, your best friends are consistency and time. It is unlikely to see your credit score have a big increase unless something big comes off of your credit report.

Here are the items that impact your credit score, how much of your score they make up, and how KOHO Credit Building can help you!

Payment history (~35%): Avoiding late and missed payments will help your score.

- Making consistent on-time payments on your Credit Building tradeline (line of credit).

Credit utilization (~10%): Using less than 30% of your overall available credit limit on your credit cards and lines of credit, will help your credit score. My experience is that having your credit use above 1% is also positive.

- Using your tradeline (line of credit), or setting your utilization each month, but keeping the amount you use under 10% of the amount you have available to you.

Credit history (~15%): Here the Credit Bureaus are looking to see how long your credit accounts have been open. Having open accounts that you have had for a while will help your score.

- Time is your friend. The longer you keep using the Credit Building tool the more it will benefit your score.

Inquiries (~10%): Every time you give your consent for a potential lender to pull your credit report it can impact your credit score. 

- Good news! KOHO does not submit a hard inquiry when you sign up for Credit Building! 

Derogatory marks (~10%): This is where items like bankruptcies, items in collection, or any other significant negative events will be documented.

- Not making your payments on time will hurt your credit score. If your account happens to be NSF for your Credit Building funds repayment, we’ll continue to collect the outstanding amount each time you load until it is fully paid back.

- Payment history (~35%): Avoiding late and missed payments will help your score.
 - Making consistent on-time payments on your Credit Building tradeline (line of credit).
- Credit utilization (~10%): Using less than 30% of your overall available credit limit on your credit cards and lines of credit, will help your credit score. My experience is that having your credit use above 1% is also positive.
 - Using your tradeline (line of credit), or setting your utilization each month, but keeping the amount you use under 10% of the amount you have available to you.
- Credit history (~15%): Here the Credit Bureaus are looking to see how long your credit accounts have been open. Having open accounts that you have had for a while will help your score.
 - Time is your friend. The longer you keep using the Credit Building tool the more it will benefit your score.
- Inquiries (~10%): Every time you give your consent for a potential lender to pull your credit report it can impact your credit score. 
 - Good news! KOHO does not submit a hard inquiry when you sign up for Credit Building! 
- Derogatory marks (~10%): This is where items like bankruptcies, items in collection, or any other significant negative events will be documented.
 - Not making your payments on time will hurt your credit score. If your account happens to be NSF for your Credit Building funds repayment, we’ll continue to collect the outstanding amount each time you load until it is fully paid back.

Note: When you first open your Credit Building tradeline (line of credit) you may see a temporary drop in your credit score, but by focusing on the actions above with your KOHO Credit Building tool AND your other financial tools it should rebound in no time!