1. Monthly payments
This is the most important of all the factors which is your payment history.
How diligent you have been with your credit in the past makes up one third of the score and it makes sense, right?
If you have paid the credit payments properly in the past, then lenders are more willing to offer credit now too.
2. Credit utilization rate/ratio.
This is how much of your credit limit have you consumed. Usually it is represented in percentages.
30% is usually the mark. Going above 30% gives a signal to lenders that you’re too reliant on credit which is a negative sign to lenders.
3. Length of the credit
Your age of certain credit product is a factor too when it comes to your credit score.
If you have not closed your many-months old credit product and you have been paying dues properly then it has a significant effect on your credit score when it’s live.
Once the debt is over, then its effect is little on the credit score. This just means when you have more experience with credit in total, it affects your credit score positively.
4. Credit Mix.
This one is great. If you have not taken any credit, then you have no credit score, and if you have taken too much credit it adversely affects your credit score.
But taking a mix of credit products can actually affect your score positively.
Personal loans, credit cards loans, consumer durable loans, etc are some examples of loan mix.
5. Enquiries
When you try to take a loan, usually a lender performs a hard enquiry which is the lender seeing your credit report, which will have a minor impact on your credit score for some time.
So if you have applied for many loans at the same time, your credit score can get a significant punch which could be an issue.
So avoid too many inquiries at the same period and you should be well on your way.