A good credit score is essential for many major life goals, for example, like buying a home. Your credit score determines whether you qualify for a home loan and if you do, your interest rate, term of credit and amount are decided based on this score. Lower rates on credit cards and better car insurance rates are also dependent on your credit score. Keeping up with your score can help your current financial situation and help you plan for the future.
Besides credit utilization, there are several other factors that impact your credit score that you need to be mindful of, in order to maintain or increase your credit score.
Keeping up with your score and checking it each month is a great place to start in order to fully understand where you can improve your score. Having an understanding of your starting point will help you make the best plan.
One thing you might easily overlook the importance of is making your payments on time. A clean payment schedule has a positive impact on your score since it makes up 30% of your overall credit score. Secondly, the length of your credit history can also play a significant role in your score.
If you have recently started building your credit score, the short credit history length could be keeping you from getting a higher score. If you’ve had your credit score for a longer time, if you close an account it can lower your average credit history length. While length is not something you can change as easily, just keeping your credit can help increase your score.
Other areas of your credit score include new accounts and applications, types of credit, and public records. These are more minor factors but are areas you should monitor if you are currently trying to improve your score.If you have credit cards and are interested in reducing your APR to 12% while keeping your current cards, earning rewards for paying card bills, and no fees, be sure to check out Gauss