CopyPastehas never been so tasty!

5 Underlying Factors That Affect Credit

by affiliatemarketing

  • 0
  • 0
  • 0

Surely you know about credit score but do you know about the factors that affect your credit score that makes it excellent or bad, well most people don’t.  The factors that are used to compute credit score are payment history, overall account balances, credit history, types of credit and inquiries.  Once you know the factors that contribute to your credit score you can improve your rating by controlling the elements.  Continue reading to know more about these factors and how you can improve your credit ranking.

Payment History:  As obvious as it may sound paying your bills on time is very important if you want to maintain a good credit record.  The consequences of a single late payment can stay on your credit report for seven years and keep troubling you.  Along with payment history certain other issues like bankruptcy, charge-offs, judgments and collections are also known to affect credit rating in a negative way.

Account Balance:  Another important factor that contributes to your credit score is maintaining a low account balance.  If you owe too much on different account then it means that you are a risk and can bring your credit score down.  Creditors prefer people who show restrain and discipline with their credit lines and not risky ones. If you want to show creditors that you are disciplined then ensure that your record doesn’t show a high dependence on credit.

 The fact is that Payment history and Account Balance together are responsible for sixty five percent of your credit score.  Because of this reason it is advised that if you want to have good credit rating then try to maintain a low balance and pay your monthly bills on time.


Credit History: Some people think that it is better to have no credit history than having bad credit but it isn’t true.  This means that the longer you keep your accounts active the better your credit scores will become.

Types of Credit:  Always make sure that you have a mix bag of credit to enjoy better scores.  Your credit report should consists of mortgage loans, credit cards, home loans and others.

Inquiry:  An inquiry occurs when a credit company pulls out your financial report for analysis.  An inquiry stays on your credit report for 3 years so multiple inquiries in a short span of time affects your credit score as it shows you are desperate for credit. A person desperate for desperate for credit is usually viewed as a risky profile by creditors and it might affect your credibility to get loans. However if you are doing a personal credit check or inquiry then it does not affect your score as it is not visible by creditors.

Based on these five factors credit scores are calculated. Now that you know about them hopefully you will take measure that will boost your score.

For more information about payday loans for bad credit please visit our website.

Add A Comment: