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Which key factors impact my credit score?
Which key factors impact my credit score?
Written by True Finance
Updated over a week ago

Payment History

This one is considered most important and looks at how consistently you’ve made payments. Since credit scores are meant to provide lenders a better idea of how likely a consumer is to pay back a debt, even one missed payment can heavily impact your scores. Remember to set your reoccurring payments to autopay to never miss a payments.

Credit Card Utilization

Credit card utilization also known as credit usage, is how much of your available credit you’re currently using. Lower credit card utilization rates suggest to creditors that you can use credit responsibly without relying too heavily on it, so a low credit utilization rate (under 30%) may be correlated with higher credit scores. Those will the best score often maintain their rate (under 10%)

Credit Age

Credit Age also known as length of credit history, refers to the length of time you’ve been using credit. You might see a drop in your score when opening a new loan, as the credit age is low, but that should rebound as you make multiple payments on time.

Credit Mix

Credit Mix isn’t the most heavily weighted factor, but lenders typically like to see that you've used a variety of accounts responsibly. Meaning all of your debt in not credit cards but there is diversity between the types of loans.

Hard inquiries

Hard inquiries also known as credit inquiries or recent credit, is a measure of your applications to open new forms of credit. There are generally two types of inquiries, hard inquiries and soft inquiries. Hard inquiries generally occur when a financial institution checks your credit when making a lending decision. A hard inquiry tends to cause a drop to your credit score and is removed from your credit report after around two years, though their effects tend to fade over time.

A soft inquiry (like what happens when you check your credit scores on True usually happens when a person or company checks your credit as part of a background check, for example. There is no impact to your credit from a soft credit inquiry, which is why we don’t show your soft credit inquiries on True

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