Owning a credit card is a good choice since it offers rewards, protection, and convenience to its users. In addition, a credit card also helps you improve your credit score, but of course, you need to use it responsibly to acquire that. If you own a credit card, you must know the factors that affect your credit score. If you want to know what are those factors this might help you.
Here are the Important Factors That Affect Your Credit Score
- History of Credit Payment
Paying your bills on time proves that you’re responsible and committed to paying your financial obligations.
- Length of Credit History
The duration of usage will tell that you are responsible enough to handle long-term financial obligations.
- Credit Limit
Keep an eye on your credit limit. Maxing out your credit card limit frequently may show a pattern of irresponsibility on the side of the lenders.
- Closing Old Cards
Discontinuing to use your old cards and closing them may harm your credit score.
- Employment Record
Being jobless and applying for unemployment benefits from government agencies may affect your score because your creditors will have no guarantee that you have funds for repayment.
- Negative Information
Showing negative information on your credit card such as late or missed payments, foreclosures and charge-offs may affect your credit score. So make sure to set limit and don’t spend on what you can’t afford.
- Monthly Bills
Make sure to keep track of your bills. Pay your bills on time because if not, it will affect your credit score.
As a final point, keeping your credit score good will give a positive impact on your financial goals. So make sure to avoid things that might affect and destroy your credit score for you to be able to take advantage of the positive benefits of having a good credit score.