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affected credit score

5 Things That Affect Your Credit Score

There are several factors that affect your credit score: new credit, a mix of credit, length of your credit history, amounts owed, and payment history. And when your credit score is affected, a lot of opportunities are limited for you. You may not be able to qualify for a personal loan from a bank, the interest rates may be higher, and you may not even get the housing you like due to bad credit.

Once you get all of these credit score factors under control, you will be able to improve your credit quickly. So, let’s consider how each of them affects your credit in more detail.

5 Typical Factors That Affect Your Credit Score

These are the 5 things that affect your FICO credit score, the most common credit scoring system.

1. New Credit

Have you opened any new credit accounts lately? Have you had any hard inquiries into your credit report? You should keep track of this because this is one of the things that affect your credit score. This actually accounts for a full 10% of your credit score and can hurt it because too many new accounts and hard inquiries can make you look like a risky borrower.

2. Mix of Credit

Among other things that affect your credit score is having a mix of different credit types. The people with the best credit scores usually have credit lines of different types. Having several accounts with different types of credit helps to show that you can manage credit well. Having a mix of different types of credit is important because it makes up for 10% of your credit score.

things that affect credit score

3. Length Of Credit History

One of the things that affect your credit score is the length of your credit history. This is actually 15% of what your credit score is based on. This includes the age of your oldest and newest credit accounts and the average age of all of your accounts. Generally speaking, if the age of your accounts is relatively old, this will help improve your credit score.

4. Amounts Owed

Your credit utilization ratio is another important factor in determining your credit score. This makes up 30% of your credit score. This is found by dividing the balance on your credit card by the total credit limit available on the card. Using more than 30% of your available balance makes you look more like a credit risk to your creditors. That’s why you should try to keep your account balances below 30% of the total credit limit available.

5. Payment History

Your payment history is the largest factor in determining your credit score. Your payment history makes up 35% of your credit score. If you miss even one payment that you owe, this will have a severe negative impact on your total credit score.

Whenever you apply for a new line of credit, your lenders will want to make sure that you have a history of reliably making all of your payments on time. Missing even one payment makes you look like credit risk and will make lenders less likely to take a risk on you.

How to Boost Your Credit Score

There are some ways that you can go about improving your credit score. These are:

  • Pay all of your bills on time
  • Pay off any outstanding debts that you have
  • Dispute any inaccurate information on your credit report
  • Avoid making any requests for new credit
  • Keep up with any outstanding payments

Improving your credit score takes time but if you stick to these habits, you will have no problem boosting your credit score.

woman fixing her credit

Getting Help With Auto Cash USA

Raising your credit score takes time and patience. If you need to borrow money while you still have a bad credit score though, you do not need to worry. One of the options that you can consider is applying for a car title loan with one of Auto Cash USA's title loan lenders. You can apply for these loans with good, bad, or nonexistent credit.

Applying For A Car Title Loan

The process of applying for a car title loan is simple. These are the steps:

  1. Have all the materials that you need:
    • Your driver’s license or another valid form of government issued photo ID
    • The lien-free title to your vehicle
    • Your vehicle to be inspected
  2. Complete the title loan inquiry form.
  3. Wait for a call from your loan specialist agent.
  4. Visit the closest store location with your vehicle.
  5. Get approved and wait for the funds to hit your bank account as soon as the same day.

Contact Us To Learn More

There are five main factors that affect your credit score. Understanding how these credit score factors work allows you to improve your credit score quickly. But if you are hit by an emergency while working toward rebuilding your credit, remember that car title loans online can help you get quick cash to cover urgent out-of-pocket expenses.

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.

Daniel Dewitt

Daniel Dewitt is a lifetime blogger with a finely-honed ability to break down, analyze, and interpret economic trends for the layman. He's fiercely invested in spreading financial literacy and helping everyday people gain the tools they need for their own economic success.