Five Factors That Can Make or Break Your Credit ScoreFive Factors That Can Make or Break Your Credit Score
Your credit score is something you can’t take for granted. It can affect your ability to get a loan, rent an apartment, and even get a job. Even some companies that offer fast cash loans can’t help you if your credit score is too low. It indeed shows how crucial this is for each individual. That’s why understanding what goes into making up your credit score and what you can do to improve it is important. This post will shed some light on the five factors that make up your credit score: payment history, debt utilization ratio, length of credit history, new credit accounts, and types of credit used. We’ll also give you some tips on how to improve each factor. So, let’s get started.
Payment History
Payment history is the most crucial factor in your credit score. It makes up 35% of your score. That’s why it’s important to always make your payments on time, every time. If you have any late payments, collections, or bankruptcies on your credit report, it will negatively impact your score. It won’t happen overnight, but your score will gradually improve as you continue to make your payments on time. That’s why you need to be sure you always make good progress with your payments.
Debt Utilization Ratio
Your debt utilization ratio is the next thing that could actually affect your credit score. It makes up 30% of your score. This is the amount of debt you have compared to the amount of …