The Many Factors Affecting Your Credit Score
February 24, 2010
To many, the concept of their credit score is something that shrouded in mystery. Basically, it’s a score that determines your credit worthiness. The higher your credit score, the more credit worthy you are deemed to be.
If you are a consumer in the American economy, this is something that you need to know. It doesn’t matter whether you have or don’t have a credit card. To a major extent, your credit score will determine your life style.
For one thing, it is the determining factor as to whether or not you get that loan. And if you manage to get a loan, it has a major impact on the amount of interest that you will pay. Your credit score will ascertain whether you are offered special credit card deals such as 0% apr cards, bonus miles, rewards program, and so on. And it determines whether you will be able to buy a home or if you will be forced to rent.
So, since this score is apparently so important, what exactly determines your credit score?
A number of factors go into determining one’s credit score. Probably, first among them is your payment history. A late payment on your bill will drive your credit score down. The later your payment is, the further down your credit score drops. More than one late payment will drive the score down even further. To be safe, if you don’t want your credit score to go down, make your payments on time.
If you have a high debt to balance ratio, this will also drive your credit score down. That is, the closer you are to the maximum limit on your cards, the lower your credit score will tend to be.
Lastly, how long have you had credit? Or, more precisely, how long have you been in their database? A college student or a person who buys everything with cash will have a lower score than someone in their 60′s who has had credit since 19.
Learn more about Susanna’s thoughts on college credit cards rates and credit card bad credit from her site.