5 Credit Factors To Keep In Mind When Building Your Credit
Even though boosting your credit score may seem like a feat of magic, credit scores are calculated based on a number of related factors. Knowing the five most important credit factors – like knowing about title loan places near me – can help you boost your credit score, even if it isn’t too hot currently.
5 Credit Factors To Keep In Mind About Your Credit Score
It is important to know what can help you boost your credit. If you’re looking to build up your credit score, here are five credit factors to keep in mind.
1. Payment History
Of the five credit factors, payment history is the most important. 35% of your FICO score, which is the credit score most lenders use, is determined by your payment history. Even if you miss only one payment, it will impact your credit.
Lenders care about payment history because they want to know that their money will be repaid if they lend it out. If you have poor payment history, it shows the lender that you are a bad risk. Conversely, a good payment history boosts your credit score because it shows you are responsible with credit.
Use automatic payments and other methods to ensure you pay every single statement. This alone will make a huge difference in your credit.
2. Credit Usage
The second most important credit factor is your credit usage. Your credit usage refers to how much credit you use within your revolving credit limits. More specifically, your credit usage is often impacted by your credit utilization ratio. This ratio is calculated whenever you divide your total revolving credit used by the total limit.
Although credit usage isn’t quite as important as payment history, it is close. 30% of your FICO score is determined by your credit usage. With that in mind, that means that over half of your credit score is determined by payment history and credit usage alone.
3. Credit Types And Portfolio
10% of your FICO score is determined by your credit mix. Credit mix refers to your credit portfolio and accounts. For example, a diverse credit account includes a car loan, credit card loan, mortgage, and student loan. Whenever you have multiple types of credit, it shows that you can juggle different bills and accounts.
If you are looking for more advanced ways to build up your credit score, you can try to diversify your portfolio. Look at the types of credit you have and see if there are any types missing. Then, try to build your portfolio to build your score.
4. Credit History Age
Your credit history age accounts for 15% of your FICO score. Generally speaking, the longer you have credit, the higher your credit score will be. That is why it is so difficult for younger adults to have a super high credit score. They simply don’t have enough credit history to make a huge impact.
Although there’s nothing you can do to increase your history other than continue building your credit, it’s important to remember that credit history does impact the score. So, don’t be too hard on yourself if the only thing dragging your score down is your history length.
5. Credit Inquiries
One of the most shocking credit factors is your credit inquiries. Every time you fill out an application that requires some sort of credit score, it places a credit inquiry. The more you place credit inquiries, the lower the credit score goes, though only inquiries made in the last year count to the score. In total, inquiries make up 10% of your credit score.
Need To Find Title Loan Places Near Me In The Meantime?
If you are learning about important credit factors a bit too late, you might feel that you don’t have many title loan places near me that accept your credit score when you need quick cash for emergencies.
We here at Nevada Title and Payday Loans Inc. have worked hard to provide a fast and easy means to get a loan with car title.
Nevada Title and Payday Loans Inc. offers title loans for car owners that fully own their vehicle. We also offer payday loans and installment loans for those that cannot handle their emergency expenses alone but don’t own a vehicle.
To get started, you can visit the Nevada Title and Payday Loans Inc. website, fill out the online form, and wait for one of our representatives to give you a call. From there, the representative will walk you through the rest of the process.
The rest of the process will involve heading to your closest auto title loans near me, along with your driver's license, vehicle, and lien-free title. There, your representative will evaluate your vehicle and documents for inspection.
Build Your Credit Up Today
If you are looking to build your credit score, the credit factors you need to know include payment history, credit usage, portfolio, history age, and inquiries. Focusing on these five factors can help you boost your score. If you are looking for title loan places near me for emergencies, visit Nevada Title and Payday Loans Inc. and fill out the online form to get started.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.