5 Factors of Credit Score to Focus
5 minute read
December 19, 2020


No wonder keeping a good credit score can help us to better qualify for a loan. But many people don’t realize on time that the health of their credit scores can improve, and they can easily be eligible and apply for a loan. Determining the important factors that affect credit score health is essential. So check out the list of 5 factors of credit score that can help you get a better concept about healthy credit score.

5 Factors of credit score

The most significant 5 factors of credit score are as follows:

The history of your payment bills

Every recipe has its specific ingredients. Some of the ingredients are very important. Without them, the recipe is incomplete. Same as in the case of credit score, payment history is the most essential and heavyweight ingredient. Payment history contributes around 35% of your total credit score. This is also a significant factor because it determines your credit. They are also used to check your reliability.

Have you made your payments on time? If you want to keep your credit score reasonable and updated, you have to be extra careful with your payments. Pay all your bills and expenses on time. Payback debt also depends upon this factor. If your payments get late, this will indeed affect your credit score, and maybe your score drops down due to this. If you miss multiple payments, then this will get you in trouble with your credit score. This will harm your credit score report. It does affect your creditability, and you are not able to get your desirable score.

I understand that some of us have a problem remembering the date and time of payments. So don’t worry; set reminders and alerts on your phone or any other device. Keep an eye on the balance in the account and lower or remove the risk. Having a good credit score makes you the best and better qualified for loans.

The ratio of Credit utilization

This ratio comes by dividing the total balance present in your credit cards by the credit limit you may use. The recommended ratio is fixed, which is 30%. You can utilize this recommended ratio on one credit card of yours or by using multiple cards. The choice is yours, and the ratio remains the same. So keep your limit low as you can because low is much better than high because if you overextend your credit utilization limit, then the risk factor becomes higher, which will affect your good credit score.

This will explain how much balance we are using and how much balance is left. This will also help to determine how much reliant we are on the non-cash funds.

Length of the Credit history

The recommended age of credit history of your account will be 15%. This will also depend upon your oldest credit account’s credit history to your new account and all the balance in your account.

If you open many accounts, your credit score declines because the more accounts you have, the less credible you are for loans. If you do not open any new account and keep all your balance in one account, which is the oldest one, then it can make you more credible for a good credit score because you have a longer credit history with the same account. This will also show that you are an expert in handling much credit.

If you open new accounts, this is not much bad idea, but it shows you less expert in handling but if you do your payments on time, then maybe they consider you and get a better score. Having a new account, perhaps not a good idea to stick to your old account and balance your credit.

The number of accounts that a person use and credit mix

This is the much less factor that constitutes a good credit score. This factor only determines 10% of your credit score. This factor depends upon the number of accounts that a person has and the total or average credit that he have in his account. For example, all the loans for cars, homes, property, or students are included. If you want a better credit score, then you have more number of accounts.

Do you think why this is important to have more accounts? So the answer is that if you have more accounts, you can’t question your credibility and have better chances to get a good credit score. This will also help you to get approval from many different lenders. They also find out from this that you can handle the payments very well. You can also divide your credit mix into two categories.

1-Revolving credit: Depends upon the utilization of your credits, and you can make payments according to the utilized credit.

2-Installment loans: You have to pay the fixed amounts at fixed times, and the rates are also fixed.

The Credit Inquiries and New Credit in account

When you apply for some new credit line, an inquiry is made upon your all credit. Its contribution is mainly 10% of your total credit score but important.

So if you have many credit accounts or have applied in more than one credit line, this will cause a moment of worry for lenders because they think that you cannot get loans from others. This can question your credibility, and your credit score declines. If you want to avoid the risk, please do not apply for more than one credit line. This will help you to get a good credit score.


Just read your credit report first and keep a check on the 5 factors of your credit score. Give priority to the steps that help you all to boost your credit scores. If you want the help of experienced professionals for this, contact Aceland Mortgage. We can help you ace your credit score and get the house of your dreams.

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