Factors that Can Affect Your Credit Score

Every individual needs to have credit score in order to take a loan. An individual who can take into consideration the payment that he has done in a couple of years is expected to have a good credit report. Not a lot of people know this but there are also some factors that can affect the three-digit number which can grant you a loan.

Axis Capital Business Funding, credit loan source for small businesses operating in the United States, has prepared some list for you to keep yourself from the capability to get a loan.

1. Thinking that you can Still pay even when its past due

If you are having complaints on how your card has charged you – say, a wrong account – you still have to pay. Nobody is exempted from the law but many people are into thinking that they can still pay even when their bill has already been passed due. Your overdue payments can still be reflected in your credit scores.

2. Not Paying Bills Entirely

It would be devastating in your credit card if you have entirely neglected paying debts but this can also happen like when you just lost your job and couldn’t afford the mortgage. A foreclosure may be the worst to happen in your card. It can automatically deduct points, sometimes amounting to 100.

3. Paying Bills Late

One of the first thing a lender wants to know is to know if you can pay your bills on time to know if you can also pay what you have borrowed on time. It is also important because it make a third in your credit score. Avoid late payments to keep your score up.

4. Maxing Out Your Credit Card

Experts say that your credit balance should not exceed 30% of your credit limit and it should ideally stay above 10%. You should frequently review your balance to keep track of your legibility

5. Closing Credit Cards

In many cities like Kuala Lumpur, Malaysia or Jakarta, Indonesia, having a credit is an option. It may also be a little absurd to keep one when you are not using it but it can make sense when you are aiming for a good credit score.

If a credit card is one of your older credit accounts, you would want to keep it open for the sake of keeping up your average age of credit, because that’s something that takes a long time to build up. Having an average credit age lower than seven years can suppress your score.