credit score

What impacts your credit score the most?

While it’s understandable to rush into fixing your credit score, a better plan would be to request your financial reports and try to figure out what you are doing wrong. Thus, understanding what makes that three-digit number go down or up is pivotal to laying out a strategy to fix your credit.

Your credit is subjected to change by different factors. Some of these include:

  • Types of credit in use
  • New credit
  • Closing old credit cards
  • Late payment

Those are just a few but the reason behind this post is to focus solely on those that have the most impact on boosting or damaging your credit score. The focus will be on not only one but the biggest three with the largest role in how your credit score plays out.

1. Payment History

This accounts for 35% of your total score and hence, adds a lot of weight to the formula that determines your final credit score. While situations are different for every borrower, the credit score matters the most to lenders. Arguments of whether they view you as responsible enough to repay your loans, start, and ends by taking your credit into consideration. The following things are taken into consideration in this component:

  • The urgency in which you pay your bills. Your credit report is analyzed by lenders to see whether your bills are paid on time. If you are usually late to pay bills, this will pull down your score.
  • If the payment of the bills in question is completed, how often do you exceed the due date? And if the due date is exceeded, how long after that date do you complete the payment? Thelater you are at completing payments, the worse off your credit becomes.
  • If your accounts have gone to collection, this will take a lot of points off your overall score as it indicates you cannot be relied upon to pay back as evidenced by the creditor giving up trying to recollect payment from you.

credit score

2. Current debts

The amount you owe makes up 30% of the entire credit score total. A situation where you have high balances on several cards raises a red flag. You appear a great risk and this damages your credit considerably.  The illustrated factors will have an impact on the credit:

  • One factor takes into consideration the total available credit you have used. In a situation where you owe nothing, your score actually lowers as compared to someone who owes little. Lenders want proof of your responsibility and ensure you are not a risk before they lend out money.
  • Another factor that can raise or lower your score is if you have various types of credits. By acquiring a mix of mortgage, credit card loans and other types of loans your credit is actually boosted.

3. Length of credit history

This makes about 15% percent of the entire total of credit score. This is the reasons why your score will stagnate if you want to build credit on a brand new account. Hence, if you have used credit for a long time your score will benefit positively.


In any difficult situation you might face, the first step is always to understand the problem. And by treating your credit cards need with care and cautious research, you will kick-start its trajectory. However, this upward trajectory can be derailed if a long period has passed since an activity was detected in your accounts. If you also have new accounts, the average age of these new accounts coupled with your old ones will determine your score.