The Finance Blogger


What impacts your Credit Score

If like many consumers, you are wondering what things can impact your credit score, this list will help you understand what you need to do to improve it. There is the obvious item – Payment History. If you are not good at paying your bills on time particularly your loans and credit cards, your credit score is going to suffer. This also includes utility bills as well as rent payments and tax bills. Pay them all on time and in full or negotiate ahead of time to make arrangements. Even if you speak to them ahead of time, there is no guarrantee that your credit score will not suffer. But there are items that will affect your credit score in addition to payment history.

What Impacts Your Credit Score

Credit Utilization – lets say you have three credit cards each with a $5000 limit. If they have a zero balance or less than 30%, then your credit score will not usually be impacted unless your late with payments.

Length of Credit History – New credit and younger people do not have much history that shows how well they manage credit. The longer you can demonstrate that you can manage credit, the better your score is going to be. fifteen years is much better than two years for example.

New Credit History – Open new accounts slowly. Someone who opens many accounts especially credit accounts over a short time period shows that they are highly reliant on credit and may be a higher risk. If you need new credit accounts do so over a period of time over several months.

Credit Mix – credit cards are considered higher risk than student loans, car loans that are secured and mortgages on your home. Lots of credit card debt or potential debt can lower your credit score.

If you want to improve your score and are not dealing with these issues properly, it is time to look at each area and make adjustments in your life. Fixing one or all of these can improve your credit score.

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