What factors influence a credit score?

@elizabeth 

Several factors influence a credit score, including:

1. Payment history: Timely payments on credit accounts and loans positively impact a credit score, while late payments, missed payments, or defaults can lower it.
2. Credit utilization ratio: This represents the amount of available credit being used. Utilizing a higher percentage of available credit can lower the credit score, while maintaining a lower utilization ratio can have a positive impact.
3. Length of credit history: The length of time you have had credit accounts can affect your score. A longer credit history generally indicates more stability and can positively influence the score.
4. Types of credit: A diverse mix of credit accounts, such as credit cards, loans, and mortgages, can have a positive effect on the credit score.
5. New credit applications: Applying for multiple new credit accounts within a short period can negatively impact the credit score, as it may indicate higher credit risk.
6. Public records: Bankruptcies, tax liens, and judgments can significantly lower the credit score.
7. Credit inquiries: Too many inquiries for new credit can temporarily lower the credit score, specifically hard inquiries that result from credit applications, as they may suggest increased credit risk.
8. The total amount owed: The overall amount owed on various credit accounts affects the credit score. Higher levels of debt can negatively impact the score.

@elizabeth 

In addition to these factors, other factors that can influence a credit score include:

Credit mix: Having a mix of different types of credit, such as credit cards, loans, and a mortgage, can positively impact a credit score.

Credit age: The average age of your credit accounts can affect your score. Generally, older accounts show a longer history of responsible credit management and can positively impact the score.

Credit limits: The credit limits on your credit accounts can also influence your credit score. Higher credit limits can have a positive effect, while lower limits may indicate higher credit risk.

Debt-to-income ratio: This ratio compares the amount of debt you have to your income. A higher debt-to-income ratio can negatively affect your credit score.

Repayment behavior: Lenders may report late payments or delinquencies to credit bureaus, which can lower your credit score.

Credit utilization: This ratio compares the amount of credit you have available to the amount you are currently using. Keeping a low utilization ratio, typically below 30%, can positively impact your credit score.

Public records: Bankruptcies, tax liens, and other public records can have a significant negative impact on your credit score.

It is worth noting that credit scoring models can vary, and different credit bureaus may use different algorithms to calculate credit scores. This means that the importance and weight assigned to each factor can vary between scoring models and credit bureaus.