Factors Affecting Credit Score

Credit score is too important in our lives to be too lax and not mind it. Even if you’re hit down low and your rating isn’t exactly ideal. You can always do something about it.

But sometimes, we all get confused. What do we have to focus on to boost our credit score, really? The factors that make up a credit score isn’t made public, but we have an idea what aspects in our financial lives we have to work on. Here are the most important ones.

1. Payment History

The golden rule is to always pay the bill on time. Delayed payments, even just for days, will affect your credit score negatively. Just so you know, payments that are done 30 days after due date will be considered late. Majority of the creditors report all delayed payments and report them to the credit bureaus in different batches. Therefore, if you are paying late even just for a day, your account could be reported together with those that are more than 59 days late.

2. Credit Balances

Your credit balances are there to show your prospective lender how much cash you keep and it can be an indicator of how good you are as a borrower. Higher balances on credit accounts are most likely to cause a negative impact on your credit score.

3. Recent Credit

Individuals who open multiple credit card accounts at a time could be a red flag to creditors. This just shows that you are strapped for cash, and lenders aren’t thrilled about it.

4. Utilization of available credit

If you’re the type of person who maxes out credit cards, well, fair enough, your rating will definitely suffer. It is recommended that you keep your balances down to less than 35% of the available credit. Difficult? Yes. Doable? Totally.

5. Length of credit history

The further your credit history goes , the better it will do good for your score. Just make sure that you have been good with your financial responsibilities!

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