What Factors Affect Your Credit Score?

Your credit score is a very important part of your financial life. Without a good score of 650 and above, it is difficult to get good interest rates or get approved for a loan. To check your credit score, order it from one of the three major credit companies or look online. The main categories which affect your credit score are payment history, credit utilization, length of history, types of credit used, and recent searches for credit. These factors mean it is best if you pay your bills on time, use a small portion of your available credit, have a long credit history, use varied types of credit, and do not make your credit inquiries all at once.

However, there are also several subsidiary causes which can affect your credit score. Honolulu Banking Rates has compiled a list of the less likely factors which can hurt you score.

Closing old accounts. This lowers your available credit base and therefore hurts your credit utilization percentage. Always keep old cards and use them occasionally to keep your score high.

Owing money. Parking tickets, library fines, court charges, and other monetary penalties can negatively affect your credit score. Try to pay everything on time, even if you do not think your credit company could find out about.

Consumer finance credit accounts. These accounts carry a negative weight because critics say they cause a vicious cycle, locking people into continuing to use consumer finance companies.

Filing for bankruptcy. Similarly to foreclosing on your house or defaulting on a loan, declaring bankruptcy shows credit companies that you cannot manage your finances responsibly. While bankruptcy is sometimes the only option, consider taking out a loan with a co-signer to consolidate your debt before declaring bankruptcy.

Not paying at all. While some people might react to large unmanageable debt by not even trying to pay off any of it, that is the worst thing you can do. Paying even part of a loan of bill off is better than making no payment at all. Start with the higher interest payments and work your way down the line.

Transferring balances. Moving debt from one credit card to another might seem like a good thought, but not only will it negatively affect your score, but credit card companies also usually have fees and higher interest rates for balance transfers.

Once you have made sure that your score is good enough to receive the best deal, let Honolulu Banking Rates help you find the best credit card rates.