When building your credit history, you may stop and wonder what certain lenders are looking for in creditworthy customers. While there aren’t any hard and fast rules, and while each lender has its own underwriting process, the credit score breakdown gives us a deeper look into the most critical elements that lenders want to look at when they evaluate your credit report.

Payment History

Your payment history makes up 35% of your credit score, meaning on-time payments are one of the most essential components of your credit score. A lender wants to feel confident knowing that you will repay debts so they don’t incur losses when they extend credit to you.

Even a single missed payment could negatively impact your credit score, so it’s not a good idea to take the payment history portion of your credit lightly. It’s a good idea to make sure that you make all of your payments on time, 100% of the time.

Credit Utilization

Things Lenders Want To See From Your Credit History

Just after your payment history is your credit utilization, which represents 30% of your overall credit score. Having a low utilization rate will give you a better credit score, and lenders will look to see how exactly you manage the balances on your credit score compared to your revolving credit.

If you use too much of the credit you have available, lenders will look at you as a greater credit risk. If you have too many accounts with balances on them, it can hurt your credit score.

Credit History Length

A lender wants to know that you’ll be able to repay funds over time in a consistent manner. In that sense, they’ll want to look at how long you’ve been able to manage your various accounts responsibly.

Your credit history length does not consider your actual age, though older consumers often have much longer credit histories, as they’ve been accumulating credit accounts and making payments on time for much longer.

To improve your credit history length, you can open accounts early and wait for them to age while managing balances and making payments.

Mix of Credit

To determine your mix of credit, lenders look at the types of accounts that you have opened. Often, lenders want to see that you have both installment loans and revolving lines of credit. It’s important to note that your mix of credit accounts for 10% of your credit score.

Final Thoughts – Maintaining a Positive Credit History

So, as you can see, there are many things that lenders want to see from your credit history.

One of the first things you want to do is get rid of any derogatory marks on your credit score. Of course, if you’re looking to potentially increase your score, you’ll want to look at authorized user tradelines.

If you’re looking to increase your credit score, get in touch with us here at Personal Tradelines to see what we can do. We’ve helped introduce thousands of customers to the beauty of tradelines, securing positive financial futures. We look forward to hearing from you.