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The Different Factors that Affect Your Credit Score

By Ruth Racey
Published: Tuesday, April 20th, 2010

Maintaining a high credit score is one of the most necessary things that you must have, especially when you do not wan to have troubles in your financial account, especially in your credit card account. Given that most consumers right now are extensively using their respective credit cards for most of the purchases that they make, surely, high interest rate payments, loan approval, and debt accumulation seriously matters. And all of these instances are determines by your credit score. Therefore, getting a high credit score is a must. Here then are the different factors that affect your credit score. Knowing them and improving them may help you improve your score for the better. 

  • Paying on time
    Remember that one of the main determinants of your score is the way you pay your debt. In this case, do not forget that your score is actually one measure of your credit worthiness. And being credit worthy surely involves consumers being able to pay on time their debt, for no lender would prefer late payments. Therefore, raising your score surely involves paying on time your debt. 
  • Credit to debt ratio
    A credit to debt ratio is the ratio between your outstanding balance and your credit limit. In this case, the higher the ratio, the lower your score will be. Remember that your credit to debt ratio represents the amount or percentage that you have used up in your credit limit. And the higher percentage that you have used, lenders would see this as an indicator that you are very susceptible to debt. Therefore, always put that ratio on check. This will surely help you have higher scores. 
  • Responsibility in paying your debt
    Payment history surely affects your credit score. In this case, getting higher score usually involves timely debt payments on a regular basis, not accumulating so much debt, not having too many credit cards, and maintaining a healthy credit at all times. Therefore, be sure always to keep your expenditures on check, spending over your credit limit will surely make you have much lower scores, for your credit limit is there for a purpose.
  • Credit history
    Also, having along credit history surely helps. This gives lenders an impression that you are able to maintain a credit account in a very useful and efficient way, given that debt ridden consumers are usually forced to close down their credit accounts. Therefore, do not just close down your credit account as much s possible. This will significantly help your score.

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