These are the factors that take your credit score to the highest possible range.
Here are the two things that account for two-thirds of your credit score:
- Payment History: Having a long history of making payments on time on all types of credit accounts is one of the most important items lenders consider before approving you for a loan.
- Owed versus Available Credit: This compares the amount you owe versus the total amount of credit available. Your credit score takes a major hit when you use more than 50% of your available credit for each accoung. Lenders see you as a higher risk and more likely to make late payments in the near future.
These are three other factors that account for about a third of your credit score.
- Length of Credit History: A credit report containing a list of accounts opened for at least ten years or ore will help your credit score. The score considers your oldest active account and the average age of all accounts.
- New Credit: Opening several new credit accounts in a short period of time can lower your score. Also multiple credit report inquiries are often seen as risky credit behavior. But “soft credit inquiries” which include requests made by you, an employer or by a lender who “pre-approves”, have little or no impact. Multiple pulls by mortgage lenders over a 30-day period count as just one inquiry so shopping lenders for the best rate should not hurt your score.
- Types of Credit You Use: Your mix of credit cards, retail accounts, finance company loans and mortgage loans is considered.
Your credit score ignores your age, salary and occupation. It does not take into account financial gifts, support you receive, or your financial assets.