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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Categories: Credit Score Articles Tags: Credit, Credit Score, credit score factors, Factors, Score
Credit Score – What Makes a Credit Score
You may have heard about the good and the bad credit score, but let’s get back to basics. What is a credit score? Why is it so important?
Credit score is our weapon in getting approved for a loan, be it a big ticket item or mortgage. Boosting your credit back up is not only difficult, but it can get confusing at times as well.
Watch this video and learn a lot of the essentials about basically the most important aspect of your financial life.
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Categories: Credit Score Videos Tags: Credit Score Explanation, Factors
3 Important Credit Score Factors
The precise details about a credit score are not really made public. Credit scores take numerous factors into consideration.
Do you know what the 3 most essential credit score factors are? And those 3 factors make up 80% of your credit score already. Such factors are payment history, amount of money owed, and length of credit history.
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Categories: Credit Score Videos Tags: Credit, Credit Score Explanation, Factors, Score
What Is A Credit Score?
You may have heard about the good and the bad credit score, but let’s get back to basics. What is a credit score? Why is it so important?
First and foremost, a credit score is a three-digit number given to those with a social security number and the range is from 300 to 850. The higher the number, the more creditworthy an individual can be. The software used to come up with the score is the Fair Isaac and Company (FICO), which is why credit score can also be called FICO score.
It is given to a person based on how he or she pays the bills. When you have loans, your creditors report your payment records to the three credit bureaus namely Experian, TransUnion, and Equifax.
When you pay your bills on time and in the agreed amounts, it will have a positive impace on your score. Otherwise, your credit score will suffer. Thus, you are forced to pay higher interest rates compared to those who have good ratings.
What makes it harder for people who have low credit scores is getting approved for a loan, be it a big ticket item or mortgage. Boosting your credit back up is not only difficult, but it can get confusing at times as well.
When that happens, it is best you seek help from someone who is more experienced or skilled as they may give you sensible advices to get your score improving.
In addition to that, your credit report can have errors in them, that is why it is highly recommended to have it monitored regularly. If you fail to do so, the errors will generally drag your rating down.
Categories: Credit Score Articles Tags: Credit, Credit Score, Factors, Score
Factors of a Credit Score
There are five basic factors that affect the scary credit score which identifies your acceptance or rejection for all loans or credit cards, and firmly changes the interest rates or the entire cost for you to borrow the funds.
As you go through this article you will read the primary overview of the most essential factors in knowing your credit or loan score. In every application you make, bear in mind that they play a big role in allowing the person to borrow or not. Here are essential factors and an estimate in the credit score.
Your payment history gets about 35 percent of it; this will change depending on the scoring agency. Obviously this is the major factor since a person with a record of a good payer is a safe person to lend money to. Lending institutions can somehow be assured if you are noted for paying your dues promptly.
If ever you have negative tracks on your credit score, there are points that will identify the amount of deduction to your credit score, first is the time since that incident occurred.
If it happened a long time ago and after that you are consistent with paying your dues on time, then that will not affect your score very much. However, if such event happened just few weeks ago, then expect for a major impact for that.
Another point is the number of missed payments which can greatly affect your evaluation. One missed payment in ten years of good credit history will not matter that much, but the more missed payments in your record, the higher your risk of getting a lower debt score. And lastly, how bad was the mistake of being late in paying your dues on one of your credit card.
On the other hand, the amount of your latest credit is another factor which carries a certain percentage of your credit score.
This includes your credit cards, car loans, home mortgage loans and other financial liabilities. Lending companies will know how you handle your credit limit if you are using it up to its maximum capacity or not. To give you a good effect on your score, you just have to pay your loans to lessen the percentage of your outstanding credit.
The time on how long you have had credit is a factor that can bear almost 15% of your credit score. This is due to the fact that time is a lot easier to establish patterns of behavior.
Even though you are a good payer but you only have a credit card for a short period of time and never had long-term loans lending companies will still have doubts on your financial ability. This is because you have not faced any of the crucial incidents of having major financial responsibility.
The last application for credit is also a factor on your credit score. Your latest credit application can put an impression that you need some sort of financial assistance or money. And lack of money can give a negative impact on your score. There are cases where lenders check your credit score which can give you a negative impact on it. Thus it is wise not to allow lenders or banks to get your credit score unless you are indeed looking for loan.
The last percentage of the credit score goes to the types of credit you are using. There are two types of credit, revolving and installment. The former includes credit cards and other related items wherein even if you pay them in full, you still retain the credit to avail it again, while the latter consists of car loans and mortgages. Normally, individuals who have various credit sources get a higher score.
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Categories: Credit Score Articles Tags: Credit, Factors, Score