There are several factors that go into getting a good credit score, including the length of your credit history and your payment history.
However, with so many different factors going into your credit report, it can be hard to determine which factors are impacting your credit score more than others.
Today, we’re going to take a closer look into why your credit report may have hit a standstill and explore how each of these factors might be impacting your credit.
Missed Past Payments
It’s important to remember that your payment history accounts for 35% of your FICO score. This means that it is one of the most important factors you need to account for.
If you miss any payments, your credit report will drop. Even a single missed payment can have a significant impact on your credit score.
The unfortunate thing is that late payments can stay on credit reports for around seven years. Luckily, the negative impact a missed payment has will diminish as time goes on. However, to remedy the situation, you’ll need to continue to make on-time payments.
High Debt Burden
Managing finances can be stressful with a high debt burden. However, it can also have a negative impact on your credit score, as your credit score takes the credit utilization ratio into account. Your overall credit utilization accounts for 30% of your credit score.
Your credit utilization is a reflection of your revolving credit card accounts. Credit card debt is the most common.
For example, you might have a credit card with a $10,000 limit, whilst carrying a $5,000 balance, meaning your utilization ratio is 50%.
It’s a good idea to keep your credit utilization ratio below 30% to keep it from having a negative impact on your overall score.
Short Credit History
15% of your credit score is composed of your short credit history. With positive management over a long period, you can increase your credit score. Of course, creditors want to make sure that you are capable of managing your history. A creditor will be far less willing to let you borrow money if you don’t have a history of making on-time payments.
If you have a short credit history, it can be really difficult to grow your credit score.
Luckily, there are a number of ways to increase your credit score if you’re suffering from any of the above credit impacters.
We highly recommend looking into authorized user tradelines if you’re looking to potentially increase your credit quickly.
Here at Personal Tradelines, we’re all about making sure our customers are confident throughout the tradeline buying process. We’re here to provide all of the necessary knowledge so that you can find the tradeline that fits your situation best. Plus, you never have to worry about low-quality tradelines.
Make sure to get in contact with us when you are ready to take the first step toward great credit!