A high credit score doesn't always mean you are a bad person. But mistakes made in the past can cause you to be turned down for a credit card. Diane Elizabeth was rejected for credit due to two late payments she made on her credit card in the last five year. After contacting her bank and reapplying she was successful.
Low credit utilization
A high credit utilization ratio can negatively impact your credit score. There are many options to lower your credit utilization. You must first make sure you don't overextend your credit card accounts. It is best to not exceed your credit limit. This will lead you to high credit utilization.
Having one type of credit
Your credit score is affected by your credit mix, or the combination of different types of credit. This accounts for about 10% of your total score. You will have a lower score if you only have one type credit. There are many ways to improve your score. You can use different types of credit, or reduce 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. It is important to make timely payments and pay off past due payments. While it won't erase past late payments, it can increase your payment history.
Multiple credit cards
It is possible to increase your credit score by having multiple credit card accounts. However, it is important that you understand the risks. You could appear as a risk by using more than one credit card. This can cause you to be more in debt and subject to hard credit checks. Not only can this hurt your score, but it can also lower your credit limit. It is best not to have more than one credit card with zero balances. This way, you can only use them when you really need them.
Long credit history
Your credit score is affected by the length of your credit history. Because your credit score will rise the more you have credit history. The number of accounts you have is another factor. A longer history means you are less likely to miss payments. You can lower the length of your credit history by closing old accounts, but this will lower your average age of accounts. The age of your last account will also affect your credit score.
Good payment history
Your payment history is a significant factor in determining your credit score. If you consistently pay your bills on time, you'll find that your score rises as a result. Your score can be hurt if you make late payments. Remember that late payments on older accounts may affect your score more than the ones that are current.
Keep track of your debt
It is crucial to keep track of your credit when you have too much credit. A third of your FICO score is based on your debt, so you must carefully monitor your credit usage. You may need to reduce your borrowing to improve your score if your debt is too high.