- Payment history: Missing just one payment can negatively impact your credit score.
- Credit utilization: The less you use of the credit available to you, the better. (Don’t max out your credit cards.)
- Credit history: A longer credit history (as long as it’s mostly a positive one) helps your score, while having no history can hurt.
- Applying for new credit: Rate-shopping for a mortgage, auto loan or student loan won’t impact your score if you secure the loan within about a month of the inquiries. Applying for several new credit cards at once, however, may negatively impact your score.
- Credit mix: Generally speaking, holding a variety of credit products (mortgage, auto loan, credit card) indicates you can handle and manage your credit.
Out of all of these factors, payment history and credit utilization carry the most weight, totaling 65% of your overall credit score.
Remember, your credit score can change often, so it’s a good idea to monitor yours and take steps that can help you avoid surprises.