Our credit score has a direct impact on the quality of our life so it would be prudent to take proactive steps to keep our credit score as high as possible.

Things That Influence Our Credit Score

The following are some of the variables that impact our credit score but the list is not all inclusive.

  • Length of time you had credit. Past behavior is a great potential indicator of future behavior so the longer a person has had credit the easier time a creditor will have assessing how likely an individual is to default. While mistakes do happen from time to time an individual who has had a good credit history for more than five years should be regarded as a “credit worthy”.
  • Types of Credit. We are familiar with credit cards which is a type of revolving credit. It is considered as “revolving” because you use it, repay the debt, then use again. You want to keep your balances as low as possible so you do not have to pay interest. By using the credit cards and paying your balances in full you are improving your credit rating and overall credit score.

Fixed credit is another type of credit that can include automobile financing and student loans. These are loans that are repaid over a predetermined period of time with fixed amounts. By having a mix of both fixed and revolving credit will help you maximize your credit score.

You should check your credit report on a regular basis to make sure there are no errors in the report. These mistakes would bring down your credit score making it difficult for you to secure a variety of financial services and even rent an apartment!  By repaying your debts on time all the time you are going to have a much easier time keeping your credit score high so only use credit if you need it!