You can control many factors that affect your credit score. First of all, the length of your credit history is a very important factor. The older your accounts are, the more likely lenders are to trust that you'll be able to pay them off on time. You can improve your score by repaying your loan over a longer period.
Payment history
Your payment history is an important factor in determining credit score. Failure to make a payment on time can cause a big dip in your credit score. Late payments are also recorded on your credit file for seven-years. Even if payments are only a few days late, it is crucial that you make your payments promptly.
Age of accounts
Credit scoring models evaluate the average age in your credit accounts. These information are used to determine your overall credit score. However, your score can be affected by age-related factors depending on which scoring model you use and what company you work for.
Credit limit age
Credit score can be affected if your accounts are older than average. Creditors love to see evidence that your accounts are in good standing. The older your accounts are, the more likely they are to have been used responsibly. Older accounts tend to have a lower average age, which can impact your credit score.
Payments made on time
It is important to make timely payments. They are reported to the three major consumer credit bureaus on a monthly basis. Late payments can cause credit scores to drop by up to 180 points. So it is critical that you pay your debts on time.
Recent loan activity
Credit score is affected by recent loan activity. Your credit score can be affected by too many inquiries and new accounts. It is possible to make a difference. The first step is to review your credit report and make any necessary changes. For instance, if you don't have any revolving accounts, you may want to open a new credit card or apply for a small personal loan. Make sure to make your payments on-time. You'll see an increase in your score over time if it becomes a routine to make timely and responsible payments.
Soft inquiries
Soft inquiries affect your credit score in a few ways. When you apply for a new credit card, for example, the lender will perform a soft inquiry. In addition, insurance companies will do a soft inquiry if you apply for a homeowners or auto insurance policy. Although these inquiries won't be visible to anyone, they will be on your report.