A credit score allows lenders and banks to determine the risk of loaning money to an applicant. Mortgage bankers, auto dealers, and credit card companies all check your credit score before processing your loan application, using it to arrive at appropriate amounts and interest rates rate. Potential employers, insurance companies, and property owners may also ask for your credit score to assess your financial stability and responsibility.

A stable credit score opens up many possibilities; job opportunities, car rentals, real estate investments—the list is long.

Hence, maintaining, repairing, and building your credit score is vital. This is why you need to know the factors that affect your credit score. Take a look:

Payment History

A long history of on-time payments shows that you’re a responsible credit card owner and can meet deadlines every month.

Meeting all your payment deadlines will improve your credit score by a mile, while missing even one payment can significantly hurt it. The consequence of missing payments will also increase the longer you delay clearing the bill.

Moreover, once you miss a payment and keep delaying it until the next billing cycle, you’ll have to return a higher amount than you initially took out due to interest and late payment fees.

The extent to which a late payment will affect your credit score also depends on how much you owe. If you start making payments in a timely manner and try to reduce the amount you owe, the impact of a low credit score will stabilize over time.

Credit Utilization

Credit utilization is another factor that can improve or destroy your credit score. While the amount you owe in installment loans is a huge part of the equation, the rate at which you utilize your credit holds the same importance.

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Your credit utilization rate is the numerical ratio between the total credit balance you owe and your credit limits on all of your accounts, credit cards, and credit lines. A lower credit utilization rate will be good for your credit score, while maxing out your credit limit will hurt it eventually.

The Length Of Your Credit History

Your credit score also depends on how long you’ve been using a particular line of credit for, how old your account is, etc.

An extensive credit history will help establish you as a financially reliable person. However, you also need to know that credit histories that are full of negative items and late payments will do you no favor.


If you’re looking for a credit specialist in Spartanburg County, you can get in touch with our team at Masters Credit Consultants. We provide detailed credit analysis services so you have the tools to rebuild your credit score. You can visit our website to sign up for a credit consultation session today!