5 Weighted Factors Which Affect Your Credit Score


In today’s world of increasing prices of almost every item available, it is necessary to look after one’s financial status before entering into any purchasing deal.

With prices of everything being so high, it becomes necessary for people to purchase them on credit or by taking a loan.

Credit basically is the power of a person to buy things with the promise that they will return the amount within a fixed period of time.

Loans are quite common in today’s world, with people taking out loans to buy cars, houses, or even for their education or business.

The approval of these loans depends on a variety of factors such as financial income, debt history and more importantly, a person’s credit score

A credit score is basically a person’s history of his repayments on his previous loans.

With regular and proper payments done, a person gets to have a high credit score. Upon missed or irregular payments, a person’s credit score lowers. With so many problems arising, it necessary for a person to have a good credit score.

Factors Affecting Credit Score

Some of the factors that affect a person’s credit score are given below –

History Of Payment

The main factor whenever a person’s credit score is in question is their previous loan repayment history.

While the calculation of credit scores is done, the weight of this factor is the maximum. With proper and systematic payments done during the previous loan, a person’s credit score increases drastically and he or she becomes eligible for future loans.

The banks keep a close check on the person’s credit card history, long with the history of their expenditure too. Missing out on a loan payment or a credit card payment might cost a person to lose out a few points on their credit score.

Thus, to keep a proper credit score level, one should make regular payments to the bank or lender, without any missed payments.

Previous Reports Of Credit And Loan

Banks also check the previous credits and loan history, with different types of loans and a number of credit cards being in consideration while doing so. Mainly there are two kinds of credits that are widely used. One of them is the most used installment loans.

These are given on education, starting of new businesses, home or car loans as well. More the type of loans one has under their name, with regular payments in each, the person can increase their credit score very easily.

Also, with multiple credit cards, all of which have spotless history, the person can show the bank that he or she is perfectly capable of handling the repayments of their loans. But one should always be careful, as more loans do not necessarily mean an increased credit score. With more loans, a person is also showing that he or she is in constant need of loans without any fixed source of finance.

How A Person Uses Their Credit Cards

A person who has taken a number of credit cards should be able to pay back every cent in a timely fashion. If a person’s credit card history shows him or her making huge amounts of transactions in a short amount of time, without them making the repayments on time, it might heavily affect their credit score.

Also, a person who is frequently reaching the limit on their credit cards, that is, maxing out their credit cards, also falls under the poor credit score category.

More the amount left on a person’s credit card more will be the credit score of that person. Thus, one should responsibly handle their finances while purchasing items on a credit card.

Credit History Age

A person having credit and loan history from a long time will definitely be chosen over a person who is just new to the concept of loans.

With a longer credit age, a person basically shows that he or she is well versed with the re[payment of loans.

With proper payments made over the years, the credit score also keeps on increasing. With more number of years on their record when it comes to loans, a person shows experience and thus, this helps them increase their credit score easily.

Amount Of Debt

People often have debt or mortgage payments to pay. With a heavy debt or incurring loan, which still has not been paid, a person’s credit score is affected in a bad way. Thus, one should pay off any loan or debt before applying for a new one, or at least show that he or she will be capable of repaying all the current loans they have on their heads.


Thus, we see that credit score is quite an important thing, and there are  a number of factors that affect it.

By keeping a strict check on these factors, one can easily maintain a spotless record and have a good credit score.