Factors That Determine Credit Scores

A good credit score is one of the most crucial points that determine whether your loan request will get approved or not. If you have a good record, you will have a much easier time getting a loan from most columbia bank medford.

Even your insurance rates can be lower if you have a good credit score. The following factors determine your credit score.

Payment Habits

This includes how quickly you have paid off your bills and any earlier loans. The later you are with the payments, the worse will be your credit score. If you have any missed payments or have cases like lawsuits, it can affect your score negatively.

Amount You Currently Owe

Your credit score will also look at the amount of money you currently owe. This can apply to other loans and mortgages that you have taken.

It is also influenced by how close you are to your credit limit. Timely and regular repayments increase your score.

Recent Credits

This factor looks at the number of recent credit accounts you may have opened. If you apply for credit too frequently, it might raise red flags. It can make a lender think you might be unable to pay the loan back.

It can also lead to hard inquiries which again lower your credit score. Make sure you do not exhibit any suspicious behavior to ensure a good credit score.

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Length of Credit History

This factor looks at how long you have been dealing with credit accounts. The longer you have been making regular payments, the better will be your credit score. It takes into consideration the age of all your credit accounts.

Types of Credit

Your credit score also considers the different types of credit accounts you might have. If you have been maintaining multiple types of credit accounts well, it reflects positively on your credit score.

Take care to keep in mind the above factors. It will not only help you get a good credit score but affect your financial habits positively.