What Determines Your Credit Score?

There a few factors that the credit bureaus use when calculating your credit score. These factors and this calculation will determine how high or low your credit score may be. The key is to get your credit score as high as possible so you can seem reliable to future lenders. The range for credit scores is approximately 300 to 900 with the average score being an estimated 725. Your credit score is very important being that the higher your credits score the more reliable and worthy you will seem to lenders.

Credit Card Balance

Be sure to keep the balances of your credit cards under the maximum limit. If all of your credit card balances are close to the limit or over the limit this makes it look like you are overextended on your credit and don't have your debt under control.

Payments

Make all of your payments on or before the due date. When you make your payments late this will look bad to potential lenders and it will also decrease your credit score. The later you are the worse the effect. So be sure to pay all of your bills on time if not earlier than the due date so that you can keep a reliable appearance to lenders.

Length

The length of time you have been with a current creditor is also important. If your credit report shows that you have been with a creditor for a long period of time making timely payments, this will increase your credit score and make you seen reliable to potential lenders.

Requests

Believe it or not, the amount of times your credit is requested also has an affect on your credit score. If you have requested your score to be viewed by a number of potential lenders this looks bad on you because it makes it seem as though you are unable of securing a loan. Therefore, when you are looking for a loan choose 2-3 lenders and stick with them. Don't let every lender out there request your credit report.

Existing Credit

It is a good idea to have a variety of credit accounts such as installments loans, paid off loans, lengthy loans and short term loans. This shows that you are capable of keeping up with all types of responsibilities and are serious about your obligations. A lender will view this as responsible and may even grant you a loan based on this information.