When you apply for a loan or credit card, your credit score is what lenders use to assess the risk involved.
A better credit score means lenders trust you more, so you're more likely to get approved for a loan with a lower interest rate.
Lenders examine your history of timely payments on past credit accounts.
Credit Limit Usage
This shows the percentage of your credit limits that you're currently using with your credit card balances. Keeping this percentage low is important for a healthy credit score.
Credit Account Age
The duration for which your credit accounts have been in use matters. A lengthier credit history usually has a beneficial effect on your credit score.
Credit Mix
Mixing different types of credit, like credit cards, loans, and retail accounts, can be a smart strategy for increasing your credit score.
New Credit
Opening multiple new credit accounts in a short timeframe may be perceived as a financial risk and could lead to a drop in your credit score.
Credit Inquiry
When you seek credit, your credit history is checked with a hard inquiry. While one inquiry usually has a small impact, several inquiries in a short span can be seen as less favorable.
Settlement and Write-Offs
Settling a debt for less than the full amount or having it forgiven by a lender may affect your credit score adversely.
Frequency Of Credit Usage
Responsibly managing your credit and consistently making on-time payments can help boost your credit score.