The Factors That Influence Your Credit Score

credit report

FACTORS THAT INFLUENCE YOUR CREDIT SCORE

  • Your pay history  (35%)
  • Revolving credit card balances  (30%)
  • Time in the bureau (15%)
  • Recent credit inquires (10%)
  • Type of credit (10%)

POSITIVE FACTORS:

  • Paid off accounts with good payment history
  • Low credit card balances
  • Limited inquires

NEGATIVE FACTORS:

  • High credit card debt
  • Line of credit debt—improperly listed
  • Late payments
  • Too many inquires
  • Judgments and Liens

PERSONAL CREDIT IS IMPORTANT

Things have changed and your personal credit is more important than ever. Because the marketplace moves so fast, many lenders have switched to a “scoring” system to evaluate credit. These “scoring” systems rely heavily on the personal credit history of business owners.

WHAT BANKS AND FINANCE COMPANIES LIKE TO SEE:

  • Clean personal credit: A credit report will be reviewed based on the social security numbers of individuals and business owners. Clean credit refers to credit reports without negative information.
  • Equal credit highs: Have you borrowed the same amount of money in the past?
  • Good : Has the applicant made loan payments on time?
  • Company financial statements: (used for business owners) Income statement—Is the company profitable? Are revenues increasing or decreasing? Balance Sheet—Does the company own (assets) more than they owe (liabilities)