01/28/2022
Your credit score is based on five core factors
35% – Payment history. Your ability to consistently make payments holds the biggest impact on your score. Having late and missed payments are detrimental to your score. If you want to improve your score, you’ll need to catch up by staying on time with future payments.
30% – Score utilization. This is the second most impactful aspect of your score. Score utilization is determined by the amount of score you’re using compared to the total score you have available. The lower your credit utilization ratio, the better your score.
15% – Length of score history. Score history takes a smaller, but still important role in influencing your score. A longer score history gives the major score bureaus a bigger snapshot of your past transactions. This allows them to predict how you will handle your score and your potential risk.
10% – Inquiries and new score. The amount of inquiries to review your score report also affects your score. Too many hard inquiries can negatively impact your score. However, inquiries made under a short period are less harmful. This is because score bureaus understand these can occur on a case-by-case basis, like when shopping for a car.
10% – Diversification of score. Lastly, the diversity of your score types makes up the last area that impacts your score. A diverse score portfolio benefits your score since it demonstrates your ability to successfully manage different types of score.
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