5 Things That Affect Your Credit Score
Are you wondering what affects your credit? Several factors can 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 Credit Score Factors
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 about your credit report? You should keep track of this because this is one of the things that have a credit report impact. This 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. 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 10% of your 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 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 credit report impact on your total 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 Begin Improving Credit And Boost Your Score
There are some ways that you can go about improving your score when you are wondering what affects your credit. They are:
- Pay all of your bills on time – You can do this by setting up automatic payments or payment reminders.
- Pay off any outstanding debts that you have – Several apps and budgeting methods can help when trying to pay off debt, such as the snowball method.
- Dispute any inaccurate information on your credit report – Checking your credit can help to find any errors that are affecting your score.
- Avoid making any requests for new credit – New credit requests affect your score, especially if they are hard inquiries.
- Keep up with any outstanding payments – To avoid further debt or overdue bills, be sure to keep to your budget and payment schedules.
Improving credit takes time but if you stick to these habits, you will have no problem boosting your credit score.
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. All credit is welcome to apply!
Applying For A Car Title Loan
The process of applying for a car title loan is simple. These are the steps:
- 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
- Complete the title loan inquiry form.
- Get connected with a loan representative that fits your needs and location.
- During the call ask any questions you may have about the title loan process.
- Meet the agent at a convenient location with your vehicle.
- If approved, wait for the funds to hit your bank account as soon as the same day or the following business day.
Contact Us To Learn More
Five main factors 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.
To speak with a loan representative about details today, simply complete the quick inquiry form online through Auto Cash USA.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.