{"id":5055,"date":"2021-04-16T10:23:00","date_gmt":"2021-04-16T17:23:00","guid":{"rendered":"https:\/\/www.soundcu.com\/?p=5055"},"modified":"2025-05-28T11:39:26","modified_gmt":"2025-05-28T18:39:26","slug":"the-5-factors-that-affect-your-credit-score-and-simple-ways-to-boost-them","status":"publish","type":"post","link":"https:\/\/www.soundcu.com\/blog\/the-5-factors-that-affect-your-credit-score-and-simple-ways-to-boost-them\/","title":{"rendered":"The\u00a05 Factors That Affect Your Credit Score (And\u00a0Simple Ways to Boost Them!)"},"content":{"rendered":"<div class=\"co-flex_row co-flex_row__blue co-flex_row__last co-flex_row__long-form-text\" >\n\t<div class=\"co-flex_row--row co-row\">\n\t\t\t<div class=\"co-long_form\">\n\t\t\t\t\t<div class=\"co-long_form--block co-long_form--block__nomedia prow items-start \">\n\t\t\t\t<div class=\"co-long_form--text pcol-md:12\">\n\t\t\t\t\t<div class=\"co-long_form--content\"><p>Whether you\u2019re looking to get your first credit card for everyday expenses or take out a mortgage to purchase your first home, credit is\u00a0an\u00a0essential\u00a0tool for helping people to\u00a0meet their financial goals.<\/p>\n<p>When applying for a line of credit, the\u00a0higher your credit score, the more likely you will be to\u00a0qualify,\u00a0and the more options you will have available to you.<\/p>\n<p>Here, we\u2019ll break down the 5 factors that influence your score\u2014in\u00a0order of most heavily weighted to least\u2014and the simple yet effective steps you can\u00a0take\u00a0to give your score a boost.<\/p>\n<h2 class=\"h3\">Payment History (35%)<\/h2>\n<p>Payment history\u00a0is\u202fthe\u202fbiggest single factor used to calculate\u202fyour credit score. Late payments (even a couple of days), past due accounts,\u00a0and\u00a0accounts in collections\u00a0all\u202fhave a negative impact on your credit.\u202fRegular,\u202fon-time payment of\u202fthe minimum amount\u202f(or greater) will improve your credit score.\u202fAn\u00a0on-time\u00a0payment history\u202fin the range of 18 months or longer will begin to show results in a growing credit score.<\/p>\n<p><strong>Quick Tips for Credit Card\u00a0and Loan\u00a0Payments:\u00a0<\/strong><\/p>\n<ul>\n<li><b>Set\u00a0up automatic payments.<\/b>\u00a0If your late payments are\u00a0due to forgetfulness, this is the easiest way to ensure you never miss a future payment.<\/li>\n<li><b>Change your billing due date.\u00a0<\/b>Suppose you have multiple bills due on the same day of the month. In that case, it may be worth changing your payment due date to align better with your personal situation (e.g., spacing out bills to make them more manageable, or ensuring your payment date is after\u00a0an income deposit date.)<\/li>\n<li><b>Explore\u00a0hardship\/ deferment options.<\/b>\u00a0If you\u2019re having trouble making ends meet,\u00a0call your creditors and\u00a0request a forbearance or payment deferral.\u00a0They may also be able to\u00a0waive late fees or even allow a\u00a0lower\u00a0payment\u00a0for\u00a0a period of time.<\/li>\n<\/ul>\n<h2>Amount Owed (30%)<\/h2>\n<p>Your credit\u00a0utilization\u00a0is\u00a0determined\u00a0by the amount you owe\u2014not\u00a0relative to\u00a0your income\u00a0but,\u00a0compared to\u00a0the total credit limit available to you, expressed as a percentage. (For example, if your\u00a0card\u00a0balance\u00a0is\u00a0$600 and\u00a0you\u00a0have a spending limit\u00a0of $2,500, your credit utilization is $600\/$2,500 or 24%.) As a rule\u00a0of\u00a0thumb, your credit utilization\u00a0should be no more than 30.<\/p>\n<p><strong>Quick Tips for Improving Amount Owed:\u00a0<\/strong><\/p>\n<ul>\n<li><strong>P<\/strong><b>ay down your balance early.<\/b>\u00a0If you\u00a0can\u00a0make small payments throughout the month, this can\u00a0help keep\u00a0your balance down\u00a0and lower your\u00a0credit\u00a0utilization.<\/li>\n<li><b>Decrease spending.<\/b> Find\u00a0areas where you can cut back on spending to lower your utilization.<\/li>\n<li><b>Ask for a credit line increase.<\/b> Increasing your credit limit is the simplest way to decrease your credit utilization without having to cut back on spending.<\/li>\n<\/ul>\n<h2>Length of Credit History\u00a0(15%)<\/h2>\n<p>Although not the most heavily weighted category, the length of a borrower\u2019s credit history is important. It\u2019s an indication to\u00a0the\u00a0financial\u00a0institutions what kind of borrower you\u00a0may\u00a0be in the future.\u00a0In addition to the overall time an individual has had credit accounts open, credit history is also determined\u00a0by\u00a0how\u00a0long\u00a0specific\u00a0types of accounts have been open,\u00a0and\u00a0how long it\u2019s been since those accounts have been used.<\/p>\n<p><strong>Quick Tips for Improving Credit History:\u00a0<\/strong><\/p>\n<ul>\n<li><strong>Get a secured credit card.<\/strong>\u00a0Backed by a cash deposit,\u00a0a secured credit card\u00a0can be\u00a0an excellent\u00a0low-risk\u00a0way for those who have not had a credit card previously to start building credit.<\/li>\n<li><strong>Keep credit cards open.<\/strong>\u00a0Closing\u00a0a credit card can negatively affect your score.<\/li>\n<\/ul>\n<p>If you have cards you aren\u2019t using, placing a small recurring charge on them (such as a phone bill or streaming subscription) can help to keep the card active while\u00a0keeping your overall credit utilization low.<\/p>\n<h2>Credit Mix (10%)<\/h2>\n<p>Credit mix is determined by\u00a0looking at\u00a0the types of credit you are carrying (this includes <a href=\"https:\/\/www.soundcu.com\/personal\/credit-cards\/\">credit cards<\/a>, retail accounts, installment loans, mortgage loans, etc.)\u00a0as well as your payment history in each area.<\/p>\n<p><strong>Quick Tips for Improving\u00a0Mix:\u00a0<\/strong><\/p>\n<ul>\n<li><b>Explore loan options that work best for you.\u00a0<\/b>Your credit mix isn\u2019t\u00a0the most impactful category, and you shouldn\u2019t pursue loans unless they make sense for you and your personal needs.\u00a0\u00a0In\u00a0fact,\u00a0you may\u00a0already have a\u00a0fair credit mix\u2014things like\u00a0<a href=\"https:\/\/www.soundcu.com\/personal\/credit-cards\/\">credit cards<\/a>,\u00a0<a href=\"https:\/\/www.soundcu.com\/personal\/personal-loans\/\">personal loans,<\/a> <a href=\"https:\/\/www.soundcu.com\/personal\/auto-loans\/\">auto loans<\/a>,\u00a0and mortgage loans are all considered different types of credit.<\/li>\n<li><b>Make sure you pay loans on time.\u00a0<\/b>A good credit mix is moot if you aren\u2019t making timely payments\u00a0\u2013\u00a0ensure you are making at least the minimum payments on your outstanding loans each month.<\/li>\n<\/ul>\n<h2>New Credit (10%)<\/h2>\n<p>Research shows that opening several credit accounts in a short amount of time represents a\u00a0more significant\u00a0risk\u2014especially for people who don\u2019t have an established credit history.<\/p>\n<ul>\n<li><b>Open new credit accounts only as needed.\u00a0<\/b>Every time you\u00a0apply for\u00a0a new credit card,\u00a0this creates a hard inquiry on your credit,\u00a0which will automatically lower your score. Having more credit than needed can also encourage unnecessary spending and lead to increased debt.<\/li>\n<li><b>Understand how hard inquiries show up on your report for different types of loans<\/b>. While\u00a0multiple inquiries over a short time frame for credit cards may result in significant\u00a0score damage, other types of inquiries\u2014such as\u00a0home\u00a0or auto loans\u2014are reported a little differently. Since lenders know people often shop around, these types of inquiries won\u2019t hit your report for 30 days, and when they do, they\u2019ll be counted as a singular inquiry.<\/li>\n<\/ul>\n<p>So,\u00a0there you have it.\u00a0If you implement these tips, you should start to see\u00a0a\u00a0gradual increase in your credit score.\u00a0Remember:\u00a0Your\u202fcredit\u202fscore\u202fis based\u202fon patterns over time, with an emphasis on more recent information. Improving credit\u00a0won\u2019t happen overnight,\u00a0but with persistence and consistency,\u00a0your score should gradually improve over time!<\/p>\n<h2>Free Credit Report Review<\/h2>\n<p>Need some extra help navigating your credit report? GreenPath\u2019s\u00a0NFCC-certified credit counselors can walk you through a free review of your credit report. They\u2019ll explain how to read the report and help you to make a plan\u00a0for managing your credit score to support your goals.<\/p>\n<p>Content courtesy of our partners\u00a0<a href=\"http:\/\/www.greenpath.com\/SoundCU\" target=\"_blank\" rel=\"noopener\">GreenPath Financial Wellness<\/a>.<\/p>\n<\/div>\t\t\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\n\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Improving credit\u00a0won\u2019t happen overnight,\u00a0but with persistence and consistency,\u00a0your score should gradually improve over time! <a href=\"https:\/\/www.soundcu.com\/blog\/the-5-factors-that-affect-your-credit-score-and-simple-ways-to-boost-them\/\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":10,"featured_media":5056,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","_searchwp_excluded":"","footnotes":""},"categories":[50],"tags":[87,88,62,134],"class_list":["post-5055","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-life-finances","tag-build-credit","tag-checking-credit-score","tag-credit","tag-credit-card"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/posts\/5055","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/comments?post=5055"}],"version-history":[{"count":3,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/posts\/5055\/revisions"}],"predecessor-version":[{"id":15475,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/posts\/5055\/revisions\/15475"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/media\/5056"}],"wp:attachment":[{"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/media?parent=5055"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/categories?post=5055"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.soundcu.com\/wp-json\/wp\/v2\/tags?post=5055"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}