What Affects Credit Score

There are many factors that could contribute on what affects credit score. If you do not address these issues, you might end up paying a lot more than you should. With the problems surrounding employment security and overall financial condition, it is very important that you understand what affects your credit score so that you can easily determine the factors to make your finances and payments geared to achieving a much higher credit score.

Paying late that is affects credit score. If you pay on time, you should not be experiencing problems like these. Do you know that 35% of your overall score is credited to your payments? If you are notoriously late for your bills payment and credit card payments, then you can definitely hurt your score. The effects of credit score can also be used to improve its future condition and that means paying your dues on time to ensure a better score.

Not paying your bills at all is affecting your credit score. There is a saying that it is better to be late than never to do things at all. The same goes with payments. Pay late than not paying at all. Not paying could mean being 1 month closer to having your account charged off which leads us to another factor. If your account does get charged off, your score can dramatically drop and this happens if the creditors notice that you do not respond to them and you do not pay even a small amount for your debts.

Another factor on what affects your credit score is your account getting sent to the collections department. Most creditors use services of collectors to track you down and get the money you owe the company. If this is your case, then you have a very bad credit score since the company has already given up on you and they are asking somebody else to do it for them. That is embarrassing and definitely this leads to very negative results on your credit rating.

What affects credit score? Defaulting on your loans. Defaults are quite similar to charge offs and it shows that you have not followed through the contract and you have not met the financial requirements. A very common issue on the effects of credit score is due to the past recession: Bankruptcy. This can linger in your report for a decade and it definitely puts a big dent to your credit score. If you want to improve your credit score, you can ask for credit counseling before filing for bankruptcy.

If you experience house foreclosure, that could affect your scores. Paying late or defaulting on your mortgage payments can definitely hurt your score and this is a negative detail on your credit report. With bad mortgage payment history, it would be tougher to get a new mortgage plan.

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