You must have heard of how impactful your credit score is. it actually plays a major role in your life and for those who do not know, in case you ever want to take any loan, your credit score can be very helpful if you have maintained it well. It actually helps you to determine about the rate of interest that you will have to pay in terms of your credit card and the loans that you take from the bank. This is why you must read ahead to know about some of the top factors that affect your credit score. If you keep these in mind and be careful, then nothing can harm you in any way.
- The history of you bill payment: First in our list is your bill payment history. You must be aware of how a credit card works. You first swipe your card to pay from your expenses and then at the end of the month, a bill is generated which you need to pay. Now, it is really important you pay your bills on time. There is a deadline within which you need to make the payment and if you do it on time, then your credit score improves.
- How much debt do you have to your name? This does not refer to the debt that you take from any friends. This is more official in nature. The amount of debt which you carry on your shoulders can mean anything such as the ratio that exists between your credit card balance and the credit card limit as a whole or even the amount of loan that you are yet to pay back in comparison to the original loan amount. If you have a too much debt, then definitely your credit score is going to go down.
- The age of your credit card: The very first question that you need to ask yourself is that how old is your credit card? What happens in life is that people prefer everything to be young. But this is not the case with alcohol and your credit card. If you have an older credit card, then it means that you have a lot of experience and automatically your credit score gets a chance to improve drastically. However, if you open a new account of close any older one, then instantly your credit card score goes down. They are inversely proportionate.
- The number of times that you have applied for a credit inquiry: This may seem like a trivial thing if you have made inquiries just once or twice. However, more than that does not seem like a great thing for you. when you submit such an application, it is placed in your credit report and represents a credit-based application. You must avoid doing it many times within a short span of time. If you want a little relief, you should know that all credit inquiries within the last 12 months only affect your credit score and nothing before that.