Factors that can affect your credit score the most

If you are looking to achieve a high credit score, you need to be aware of these details. Many factors, and even actions on your part, may be able to affect your credit score in some way.

There are many different scoring models, but in general, most of the time, the purpose is to find out about your credit risk. In other words, how sure are you that you will be able to pay your debts. Among many factors, we have selected the most important ones. Get to know them.

Payment history and the use of credit

We start with the factors that have a higher degree of importance in anyone’s credit score. First of all, the most important of these is still your payment history. If they are good, this is great for your score. But otherwise, if they are bad, it ends up being terrible.

If you have already been harmed by this, all is not lost. Change your behavior and start being faithful to your payments, always paying on time to improve your situation. The use of credit also has a very important ranking in people’s history.

That is, the amounts owed, whether in loans of any kind, mortgages, count a lot at this point. The rate that is used on your current credit needs to be lower compared to the total balance you owe, along with your total credit limit and also the total revolving accounts.

Mix, types of credit, and the length of history

These options are already considered unimportant, but of course they are still. Experiences with various types of credit, from credit cards to certain types of loans, will also usually help to improve your credit score.

The credit mix can be interesting when you already have a loan, because taking out a loan just for that is not an advantage, especially because of the interest. Now, acquiring a credit card and using it only for minor expenses can also be a good idea.

About the length of your credit history, the age, i.e. the length of your accounts, whether old or recent, and their average age are looked at. Also, whether you have recently used one of these accounts.

About recent credit

As for recent credit, it is considered less important, compared to the above. However, it may happen that your reports are reviewed by lenders, as well as your credit score, when you apply for a new line.

This can usually be on reports for a period of 2 years. Before the lender releases credit to you, it is possible that you will go through an investigation. That is, you may be asked a few questions. Usually the ones that are more relaxed will not hurt your score.

In the end, the conclusion is that there are numerous credit scores and there is no way to know what will be used by the lender when evaluating your application. But for sure the information available in the credit reports will be very important at this time. So try to do everything correctly, so that these factors are always positive.