The biggest factor that will affect your credit

The biggest factor that will affect your credit

Talk to anyone in the credit industry and they’ll tell you that having good credit makes your life much easier when it comes to borrowing money. Getting a loan for your new home, buying a car, even renting an apartment can be much easier if you have excellent credit. But what does that mean? And how do you get it? In this article, we’ll look at the biggest factors that will affect your credit score and how you can go about improving it in no time.

Credit card utilization

There are two types of utilization ratios: overall and type. The former is what most people think of when they hear credit card utilization ratio, while type refers to how much you owe on revolving accounts as opposed to installment loans like mortgages or car loans.

Length of credit history

Your length of credit history (measured in years) is how long you’ve had any type of account reported to a bureaus. It doesn’t matter if it was with a mortgage company, department store or telecom provider; if it resulted in an active account that was reporting to a bureau at any point, it counts toward your length of credit history.

Type of credit used

Two key factors for getting good deals on insurance are your type of credit and where you live. Credit cards and medical bills can help offset premium costs, while rental histories, apartment size, income levels and mortgage amounts also influence what you'll pay to insure your property. Because insurance is available in almost every state, location is a big factor. If

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A high credit score can mean much lower interest rates on things like car loans and mortgages, as well as better offers from credit card companies. On the other hand, having a low credit score can make it difficult to secure financing and can even lead to higher premiums on your car insurance policy or higher interest rates on your home insurance policy. If you’re not sure how to maintain or improve your credit score, here are the biggest factors that will affect your credit, both good and bad.

Step one in the journey to improving your credit score and overall financial health is understanding how the different factors that make up your credit score affect it. There are five main components of your credit score, each weighted differently to represent its importance to lenders, and each affecting your score differently based on what goes into it. The biggest factor that will affect your credit score is by far the amount of debt you have compared to how much you’re making—other factors pale in comparison.