A credit with bad history can get a full stop in your life. Generally, a credit score is a thing that decides whether you are going to get a new loan, or going to get relaxation in interest rates. A lender will check your credit history and as well as score before lending money. Moreover, your payment or credit history is your portfolio that tells how you are in paying debts. There are enormous reasons and benefits that your credit must be cleaned and perfect, and you can have a smooth life with having credit with a fine score.
Every company or service has different methods to calculate the credit score. You perform many actions with the credit, and perhaps you might not be aware of the complete knowledge that which action can affect your credit history badly, thus, before you affect your credit, you must know the factors that can cause a bad impression on your credit. While estimation methods vary from company to company, here are some common factors that can highly affect.
So the first thing is your credit history on which you have to keep a close eye carefully. Doubtlessly, credit history is the most important factor on which lender, banker, company, service provider, etc will have a look. This factor also builds or breaks your credit score, and even one missed or late payment will create a bad impact on credit score.
Credit Utilization is another factor that can cause bad credit. Your credit utilization ratio is calculated by dividing the total of renewable credit that you are currently using by the sum of all of your renewable credit limits. This ratio looks at the amount of available credit you use and can give a glimpse of your dependence on non-cash funds. Using more than 30% of your available balance is negative for creditors. Credit use represents 30% of your FICO® points.
Credit history length can also decide your credit score. How long you hold your credit payment and debts make almost 30% of your credit history. It includes your credit account age that how old it is and also a new account’s duration is calculated. Additionally, the opening of a new account suddenly can also affect your score. Generally, the longer you credit history, the better will be the credit score.
Fixing the Bad Credit Report Will Improve Your Score
The credit repair depends on the mistakes that you have made in credit history. Of course, you want credit repair, because having bad credit is like having a panic headache. So, before getting your credit repair, you have to take a look at your payment history and have to find out which reports and things are creating a bad impact on your credit score.
Any negative information simple will affect your debts and new loans. However there are multiple ways for credit repair, and many companies offer the credit repair service, before doing any action you have to order your reports. Sorting out negative reports will simply make your track to good score easy, and you will come to know which things are needed to fix.