Whether you live in Arizona or anywhere else, your Arizona credit score is one of the most important numbers in your life. It affects your ability to rent or purchase on credit. Your credit score also affects the interest rate you are changed. Therefore you should do whatever you can to improve your credit score.
Things That Affect You Credit Score
Almost everything you do financially impact your credit score. However, some things have a greater impact than others. The 5 things that have the biggest impact on your credit score are:
- Your Payment History
- How Much You Owe
- How Long You’ve Had Credit
- Your Last Application for Credit
- The Types of Credit You Use.
Your Payment History
Your Payment History is the most important thing when it comes to calculating your credit score. In fact it represents about 35% of what the credit reporting companies use to calculate your credit score. They take into consideration how recently you have made late payments, how often you make late payments, and how late (30, 60, or 90 days) your payments tend to be. How recent your last late payment was also lowers your credit score.
How Much You Owe
The amount of money you owe and how much of your available credit you’ve used has a serious impact on your credit score. Most people use only 30% of their available credit. However, if you are among the 10% or so of people who have used as much as 80% of your available credit, it will have a negative impact on your credit score. If your credit card has a large balance each month, you may not only have a bad credit score but businesses may not be will to extend you any more credit.
How Long You’ve Had Credit
Part of what decides your credit score is the number of years you’ve had credit. If you have had credit accounts for many years, this can have a positive impact on your credit score. However, if you’ve only had credit for a few years it’s going to cause you to have a lower credit score. According to Fair Isaac, the oldest credit account the average American has is about 14 years old. People who have been able to establish and maintain credit account for that long will help increase their credit score.
Your Last Application for Credit
The more often you apply for credit and are denied, the lower your credit score will be. Every time you attempt to open a new credit account it negatively impacts your credit score. When you apply for credit very frequently it makes you look like you are struggling financially and it will result in you having a very low credit score. One thing you should do when you’re trying to improve your credit score is to resist the urge to apply for every credit card Arizona stores offer to you.
The Types of Credit You Use
The credit reporting companies like to see people have several types of credit. It will improve your credit score if credit cards (revolving credit), mortgage loans (long term, and closed end (car loans). Although the types of credit you have do impact your credit, it only plays a small role in determining your credit score.
Arizona Credit Lawyers – Gary Nitzkin
3260 N. Hayden Road, Suite 210
Scottsdale, AZ 85251
Phone: 480-771-6001 / 480-771-6001