A credit score is an important factor that makes borrowing easy and affordable. If you were planning to get a high-value loan anytime soon, you need to have a good credit score. It is very important to build your credit score with the right credit activities that can affect your credit profile. If you are not having a good credit score, you will not be ending up getting approval and an affordable rate of interest. Make sure you are going for the right credit activities so that you build your ‘my credit score’ over time. Here are all the factors that affect your credit score
Credit mix
Your credit mix is the mix of credit accounts that are active in your credit profile. It is a high-impact factor that needs to be balanced in order to improve your credit score with time. You always need to have a balanced credit mix, which means having both secured and unsecured loans. Must Read : Does the credit score get affected when we check our credit report online?.
Payment
Payment history is a very important factor that affects your credit score. Even a single missed or delayed payment can drop your credit score. Therefore, it is very important that you automate your payment and set reminders so that you are able to make the payment before the due date. Payments have a high impact on your credit profile, and if you do not have a clean track record, you will not have a good credit score. Whether you are paying your credit card bills or loan repayment, you need to make the payment by the due date. Learn how to get a business loan.
Credit utilisation ratio
This is one more important factor that has a vital impact on your credit score. A credit utilisation ratio is a ratio between the total credit limit available to the individual and the credit limit that has been exhausted by the individual itself. In order to have a good credit score, your credit utilisation ratio should be below 30%. If you exceed your credit limit, you will not be able to improve your score.
Number of multiple applications
Credit applications are an important factor that impacts your credit score. It is important that you do not apply for multiple loans within a short span of time. Every time you apply for a loan, the hard inquiry on your credit profile will eventually damage your credit score. Therefore, it is important that you stop applying for multiple loans if you have faced loan rejections.
Finishing up
How to check credit score? Visit the official website of Clix Capital and find the option for my credit score. Check your score and improve it with time.
