Factors That Affect Your Credit Score

1. Payment History: Your track record of paying bills on time significantly influences your credit score. Late payments, defaults, and bankruptcies can have a lasting negative impact.

2. Credit Utilization: This refers to the amount of credit you are using compared to your credit limit. A lower utilization rate is generally better.

3. Length of Credit History: The longer your credit history, the better. This includes the age of your oldest account, the average age of all your accounts, and the age of specific types of accounts.

4. Types of Credit: A diverse mix of credit accounts (such as credit cards, installment loans, mortgage) can positively affect your score.

5. New Credit: Opening several new credit accounts in a short period can be seen as risky and potentially harm your score.

Steps to Improve Your Credit Score

1. Check Your Credit Report: Obtain a free copy of your credit report from each of the three major credit bureaus. Review them for errors or inaccuracies and dispute any discrepancies you find.

2. Pay Bills on Time: Ensure you meet all payment deadlines to maintain a good payment history.

3. Reduce Debt: Focus on paying down existing debts, starting with those with the highest interest rates.

5. Limit New Credit Inquiries: Only apply for new credit when necessary to minimize hard inquiries on your report.

6. Build a Long-Term Credit History: Keep older accounts open and active to contribute to the length of your credit history.

7. Consider a Mix of Credit Types: Use a mix of credit types responsibly to potentially improve your score.