5 Factors that affect your credit score

1. Payment History

Payment History

Out of 100%, payment history affects 35% of the credit score. The only way of preventing bad score is by paying credit card bills and EMI within the due date.

2. Credit Utilisation

Credit Utilisation

Credit utilisation affects 30% of the credit score. It is nothing but the percentage of the money the user is taking as a credit on the overall available credit limit on all the cards. So, avoid taking credit above 30% of the total available credit.

3. Credit History Length

Credit History Length

Length of credit history affects 15% of the credit score. Maintaining a credit card for many years is good for credit score. So do not deactivate your oldest credit card.

4. New Loans

New Loans

Applying for new loans frequently affects your credit score by 15%. So, repay the existing loan before applying for a new one.

5.Types of credit

Types of credit

This account for only 10% of the overall credit score. In order to maintain this, one should hold different types of credits like credit cards, mortgages loans etc. Since it accounts for only 10%, consumers can neglect it.

Check out our financial calculators here


Leave a Reply

error: Content is protected !!