High-Impact Factors
Medium-Impact Factors
Age of credit history: This doesn't refer to your actual age. Rather, it shows how long you have been managing credit. You will be considered more worthy of getting credit if you can prove that you have been maintaining your credits responsibly for a longer period. To sum it up, avoid closing your oldest credit card account, as it might drastically bring down your credit score.
Low-Impact Factors
Total accounts: This doesn't just refer to your savings accounts. It includes the number of credit cards, loans, or mortgages that you have. A variety of accounts is always preferable, as it shows that you have been trusted with credit by other lenders.
Hard inquiries: A hard inquiry refers to applying for a new line of credit - be it a loan, a new credit card, a rental apartment, or a mortgage. Too many hard inquiries in a short period present you as desperate for credit. It also indicates that several other lenders have refused you the same.
How is My Credit Score Measured?
Not using a beam-balance, for sure! I'm just kidding. It is a complicated fact-based mathematical model - an algorithm to be precise - which evaluates your financial history and comes up with the score. You cannot possibly calculate it on your own.
Are you still confused? Put yourself at ease, as we are here to provide you with the necessary information to help you maintain a good credit score.
- Credit card utilization: How much should you borrow through your credit cards? Experts recommend that you shouldn't exceed 30% of your available credit limit. A low rate of credit utilization indicates that you spend responsibly. It also suggests that you are more likely to repay the loan on time. Additionally, keeping a substantial buffer on your credit limit also helps you in times of crisis or financial emergencies.
- Payment history: Pay your bills on time. By doing so, you let lenders know that you are reliable and that you ensure timely repayment of credit. If you miss a payment, your credit score could fall significantly.
- Negative remarks: Your credit reports must be free of any disparaging remarks. This includes accounts in collections, bankruptcies, as well as foreclosures.
Medium-Impact Factors
Age of credit history: This doesn't refer to your actual age. Rather, it shows how long you have been managing credit. You will be considered more worthy of getting credit if you can prove that you have been maintaining your credits responsibly for a longer period. To sum it up, avoid closing your oldest credit card account, as it might drastically bring down your credit score.
Low-Impact Factors
Total accounts: This doesn't just refer to your savings accounts. It includes the number of credit cards, loans, or mortgages that you have. A variety of accounts is always preferable, as it shows that you have been trusted with credit by other lenders.
Hard inquiries: A hard inquiry refers to applying for a new line of credit - be it a loan, a new credit card, a rental apartment, or a mortgage. Too many hard inquiries in a short period present you as desperate for credit. It also indicates that several other lenders have refused you the same.
How is My Credit Score Measured?
Not using a beam-balance, for sure! I'm just kidding. It is a complicated fact-based mathematical model - an algorithm to be precise - which evaluates your financial history and comes up with the score. You cannot possibly calculate it on your own.
Are you still confused? Put yourself at ease, as we are here to provide you with the necessary information to help you maintain a good credit score.
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