In our modern society is very important to know what affects credit score, especially because it is such an important factor in our lives. A good score is something many people should have and somehow, people would want to do everything to boost their credit score. Why is this so important? Most of all because applying for loans is way easier if your score is good. It will make your life a lot easier, financially wise.

Already have a good score? That is not a reason for not trying boosting your rating anymore. Because a better score will make it easier to obtain the best loan possible, as well as the best credit card deal. Having a credit score of 668 is good, but your interests rate will be decreased when you have a score of 670. Such a minimum in difference can literally mean thousands of dollars in your bank! So boosting your credit score is even important if you have a good score already. Low interests and a higher chance in applying is always a reason to optimize everything for! Aside from, of course, increasing your responsibility when it comes to money!

But what affect the credit score? There are some ways to improve your credit score. They may take time, but there are also tricks which only take a couple of days or weeks. Anyway, start right away, it will be worth it.What Affects Credit Score: Improve your Credit Score

What Affects Credit Score? Improve your Credit Score

Check credit reports for errors

If you receive a credit report, look closely at them. The smallest mistakes can have big effects already. Having a low score but no idea why? A flaw in the report may be the reason. It is easy to just contact the agencies which do these reports and ask questions about the report. They have to investigate when you suspect an error, so why wouldn't you try this?

Pay of your Balances

Every month you build up debt. Pay it off, every month. Make sure to have a balance of zero every month. Not only will you save a lot money on interest rate, but you will also show you know how to act responsibility with money and this will result in a better credit score. The thing with credit cards is you are getting in debt obviously, spending money is made really easy with these cards. But you don't want to do so, you want to spend the money you have, not the money you need to borrow. So make sure to have a positive balance, all the time.

Decrease the Number of Cards

Having multiple credit cards affects your credit score big time. When you need five or more cards, there will probably something wrong with the way you handle your money, so your credit score is affected by this. Make sure you don't have more than two credit cards, this shows you are responsibility. Besides the direct effect of having only two cards there is the indirect effect as well. If you have a lot of cards it is hard to keep track of your expenses on every card you are using. Building up high debt is also way easier when you are having multiple cards.

Pay your debts on Time

As said, not only having a positive balance is important, but whether the payment is on time is on time or not is important as well. If you pay on time, it shows you know how to handle money, as you pay on time every time. Of course, if you are already having some debts this can be a lot harder, because you need to pay all of them off. Having some debts and your payment is overdue? Try to pay as soon as possible, in the end, old 'late' payments will expire, so it is important to make them old as soon as possible.

How Much you Use of your Credit Card

To show the credit report agencies you are not in big need of money it is important to never make fully use of your credit cards. If you stay under 50% of your credit card limit, you are good to go. This means if you have multiple credit cards, you can better divide the money between them instead of fully use one of them. Use two cards and keep them both under 50%, it's better than one above!

Concluding thoughts

As described above, the credit score is affected by one thing mainly: how good you are with money. If you are responsible, you will have a higher rate, acting irresponsible lowers your score. Things like number of cards, the usage of your credit card, the time when you pay and whether you pay everything or not is important in building your credit report.

Hopefully you gained some general knowledge on what affects credit score and found some ways to improve the credit score!