What does a “healthy” credit report look like?
I’ve read very similar opinions on the “ideal” credit report from a variety of courses including Money magazine, the free annual credit report website, a few different finance books, Kiplinger’s, and others. The general consensus from experts regarding a “healthy” credit report is as follows:
2 installment loans – home mortgage and auto loan are most common
3 revolving accounts with balances – credit card accounts
All balances should be kept at or below 30% of the maximum line of credit
Ideally, balances at or below only 10% of the maximum line of credit are best
It is better to have 3 cards, each using 20% of their max rather than one card using 60% of it’s max
Additional revolving accounts beyond 3 are okay, as long as not carrying balances
No collection accounts
Collections aren’t good but there are differences.
Medical collections are not as bad as other (utilities, etc.) collections
No public records
No late payments