Credit Score: 5 Factors that Impact Scores
Your credit score is important for a number of reasons, but most importantly it impacts how much you'll pay in terms of interest on the credit or mortgage loan you take out.
See: Frequently Asked Mortgage Questions
Your credit score is impacted by the following:
1. Payment history - you better make those payments on time!
It's important to make your payments on time, even if it's just the minimum. Late payments, even if you get the late fee waived by your bank will negatively impact your credit score.
2. Credit utilization - whats the amount of credit you used compared to your available credit.
Don’t go out and max out your $15k credit line just because you can!
3. Length of credit history (how long you’ve had credit)
The longer you've had credit, the better your score would be.
4. Diversified credit - you might have credit card debt, or a car loan, or a home loan. Banks and lenders like to see that you’re able to pay back different types of credit.
5. Hard inquiries - you’re not constantly looking to apply for a credit card or loan. Most times when you do; the bank or lender will do a hard inquiry on your account which can impact your credit score negatively as it suggests you’re struggling with your finance and have a need for more money.
To find out your credit score, we recommend using some of the following websites: