Here are the five main factors that affect your credit score.
Payment History
Your payment history is the largest factor when calculating your credit score. If you always pay your bills on time on you’re on the right track. However, if you have a shaky payment history this is one of the biggest reasons your credit is suffering.
Make sure you’re always paying at least the minimums and are always paying your bills on time.
What You Owe
What you owe compared to how much credit you have available, also known as your debt to credit utilization ratio, is the second largest portion of your credit score accounting for 30%.
If you owe a significant amount of money compared to what you’re allowed on your revolving credit it could be negatively impacting your credit score. In this case your best bet is to pay down some of your debts.
Length of Credit History
Your length of credit history comes next on the list. Unfortunately there’s nothing you can do to increase this. Just be sure to keep any old credit cards you have open and be patient for this metric to improve.
Credit Mix
Your credit mix accounts for ten percent of your score and is determined by the diversity of your credit accounts.
New Credit
New credit also accounts for ten percent of your score. Opening up new credit, especially multiple new credit accounts, can adversely affect your credit score. It’s best to only open up new credit when really needed.
Improving Your Credit Score
If you want to improve your credit score the best things you can do are to always, always pay your bills on time and reduce the amount of debt you owe. If you can successfully do these two things you’ll see your credit score begin to rise.