A high credit score does not always indicate a bad credit rating. A credit card application can be rejected if you have made mistakes in the past. Diane Elizabeth is a woman with excellent credit scores. However, she was denied credit because of two late payments on one her credit cards in the past five years. After contacting the bank, she was successful in reapplying.
Low credit utilization
Having a high credit utilization ratio can have negative effects on your credit score. There are several ways that you can reduce your credit utilization. First, you need to make sure that you do not overextend your credit cards. High credit utilization can be caused by using credit cards beyond their limits.
Credit cards can only be one type
Your credit score is affected by your credit mix, or the combination of different types of credit. This makes up about 10% of your overall score. Your score will be lower if you have only one type of credit. There are several ways you can make your score better, including using different types of credit and reducing your utilization.
Late payments
Your credit score might be negatively affected if there are regular late payments. There are still ways to avoid paying late and to improve credit scores. Pay your past due debts promptly and catch up on them if possible. While this won't erase previous late payments, it will raise your payment history.
Multiple credit cards
Although having multiple credit cards can be a great way of improving your credit score, you need to understand the risks. Using more than one credit card can make you appear like a risk to creditors and can lead to more debt and hard credit checks. Not only will this affect your credit rating, but it could also lead to a lower credit limit. It is best not to have more than one credit card with zero balances. So you only have to use them when you need them.
Credit history that is long
Your credit score is affected largely by the length of credit history. This is because the longer your credit history, the higher your score will be. The number of accounts you own is also a factor. A longer history means that you are less likely not to miss payments. Although you can reduce the length of credit history by closing older accounts, this will decrease your average age of accounts. Credit score is also affected by the age of your oldest account.
Good payment history
Credit score is affected by your payment history. You'll see a rise in your credit score if you make your payments on time. Your score can be hurt if you make late payments. It is important to note that late payments from older accounts can affect your score.
Keeping track of your debt
Keeping track of your debt when your credit is too high is a critical part of the credit repair process. Your credit score will make up a third of the FICO score. You must be careful about how you use your credit. Your score may be affected if you have too much debt.