What Determines Credit Score

There are several things that influence a person's credit score. Learning these factors can help you make the financial adjustments you need to gradually improve your credit score for the future, landing you better loans. Here are the basics of what goes into a credit score.

Do you make your payments a few days late on a regular basis? Then be sure to stop this practice! Payment history makes up around 35% of your credit score, and lenders see people who make late payments as a high risk. Even just making the minimum payment on time is much better than paying a larger sum a day or two late.

Another big factor in the credit score is your ratio of available credit to current debt. Having your credit card close to maxed out is not a good sign to lenders and will bring your credit score down. With that in mind, if you have several sources of credit, your best move is to work on paying down the one with the highest debt first.

About 10% of your credit score comes from recent credit activity. If you've checked your credit score multiple times or have applied for multiple loans in a short period of time, lenders will see that as a threat and that activity will lower your score.

The number of years you've had credit of any kind makes up 15% of your score. The longer your credit history, the more reliable you are considered to be. 

The more variety in the types of accounts you have open, the better your score may be. Just be sure to keep each one paid off to around 30% of its available credit.