There are 6 key factors that make up a credit score. It is important to know what they are and how they will affect your credit score. Make sure to check up on it at least twice a month. Credit Karma have everything you need to do just that. I will go into more detail on how to maintain and increase your credit score. Continue reading below..
Any late payments will bring down credit score significantly. That is why it is the most important factor. Paying at least the minimum if not full amount before due date to avoid any late payments on report.
How long have you been using credit? Age of credit is 15% part of your credit score. The sooner the better to start using credit. One way to get this on track is to be an authorized user to someone with a lengthy age of credit.
Mortgages, auto loans, student loans, credit cards, just to name a few types of credit. Having a mixture of different types of credit will affect 10% of your credit score.
Keeping your utilization rate at 30% or lower is the second most important key factor.
(Example:
Credit Limit = $1000
Credit Balance = $300
Utilization Rate = 30%)
Credit inquiries stays on your credit report for 24 month but after 12 months if typically shouldn't affect your score. Inquiries is when applying for a car loan, mortgage, credit cards etc.. (when credit report is being pulled to get analyzed for a loan).
There should be no derogatory marks when starting your credit building journey. Remove or dispute if any to get it off your credit report.
Be Sure to check out:
How I Increased my Credit Score From 580 to 690
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I hope this article was helpful, thank you for reading and have a wonderful day.
