You’re likely familiar with your credit score and how that impacts your ability to take out a loan, but do you know how it’s calculated or what factors are taken into account when calculating it?
Hint: it’s not just about making your credit card payments on time.
Here are 5 factors that affect your credit score, and how much of an impact each one makes.
🔸 Your payment history
(Think payments made on time versus late, paying your credit card bill in full each cycle) This contributes to 35% of your credit score
🔸 Amounts owed
(Wow much of your available credit you’ve used) This makes up 30% of your credit score
🔸 Length of credit history
(How long you’ve been building your credit; the longer, the better) This factors into 15% of your credit score
🔸 Your credit mix
(The different types of credit; credit cards, auto loan, etc.)This is 10% of your credit score
🔸 New credit
(Think opening up a new credit card; this can essentially lower the average length of your credit history but can also be more of a positive thing in the long run) This accounts for 10% of your credit score
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