The Factors That Determine Your Credit Score

The credit score that is assigned to you by the credit bureaus will affect many aspects of your financial future. Your credit score is comprised of four main factors. It is combination of your payment history, how much you owe in comparison to how much you have available, the length of your credit history, and the number of credit inquiries for your credit report.

Your credit score is determined by your payment history and how much you owe your creditors. Making your loan payments on time will give you a higher score. Late payments, collection accounts, judgments, and bankruptcies will not only lower the score but will negatively impact your credit worthiness for many years. To keep your score high, try to use less than 30% of the total available credit on your credit cards or other revolving credit accounts.

The length of time that you have been using credit and how often your credit report is requested influences your credit score as well. A young person who has not had many loans may have a lower score than someone who has been paying on a mortgage for the past fifteen years. It is important to understand that the more times your credit report is requested, the lower your credit score will become. For this reason, do not apply for numerous credit cards or loans within a short time frame.