Posted By
By Amanda Huon
Special to the Financial Independence Hub
If your goal is to boost your credit score then it’s important to know what factors affect it. There are a lot of variables that come into play when it comes to getting your perfect credit score. These variables range from payment history to credit utilization. It’s important to always be aware of your credit score because it plays a significant role in weighty decisions, such as purchasing a house, earning an amazing career, and having financial independence!
These quick tips will help you improve your credit score:
Level of Debt
If you have a high level of debt, you’ll most likely suffer from damaged credit in one way or another. The amount of debt that you owe affects 30 per cent of your overall credit score. That’s a large chunk! However, all hope is not lost. There are always opportunities for you to repair your credit. In fact, there are credit repair companies out there that use personalized methods to help fix damaged credit score.
Payment History
Another critical determinant of your credit score is your payment history. If you have a long history of on-time payments then your credit score is more likely to be in good condition. However, missing a payment will negatively impact it. Of course, the longer the bill goes unpaid the greater effect it has on your credit. This is why it is extremely important to always pay your bills on time.
Credit Usage
This tactic can yield speedy results. It can either quickly boost your credit or quickly slash it. Credit usage mainly focuses on the ratio between the balance you owe and your total credit limit on all you revolving accounts. This ultimately means that using your credit card at a lower rate can result in a better credit score.
Length of Credit History
A couple of factors that affect the length of your credit history will inevitably affect your credit score. These are factors such as the age of your oldest account, the age of your newest account, and whether or not you have used it recently. If you try to open a new account the score of your old account can be negatively impacted and lowered. You also have to be careful with your decision to close accounts especially if these are your oldest accounts since they can still stay one your bank record to a maximum of ten years.
Types Of Credit
Lastly, the type of credit that you have on your report revolves around accounts and installment loans. It means that having both types of accounts is better for your overall score since it shows banks that you have experience managing more than one type of credit. Installment loans are an amount of money owed that is paid over time throughout a longer period of time via scheduled payments.
Manage Your Credit Effectively
Whether you’re an ISFJ who’s careful with their credit or a carefree ESTP, there are so many ways to achieve your best credit score. You just have to be willing to work with the numbers and put in the time that it takes for your actions to take effect. Be patient and good things will come.
Amanda Huon is a contributing writer for Markitors, a Digital Marketing Company. In her free time, she enjoys expressing her creativity through drawing.
