A high credit score doesn't always mean you are a bad person. A credit card application can be rejected if you have made mistakes in the past. Diane Elizabeth is a woman with excellent credit scores. However, she was denied credit because of two late payments on one her credit cards in the past five years. After contacting the bank, she was successful in reapplying.
Low credit utilization
High credit utilization can lead to negative credit scores. There are many ways to reduce your credit utilization ratio. First, make sure you are not maxing out your credit cards. It is best to not exceed your credit limit. This will lead you to high credit utilization.
A single type of credit
Credit mix (or the combination of several types of credit) can affect your credit score. This accounts for about 10% of your total score. Your score will be lower if you have only one type of 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 can be adversely affected if you are making late payments regularly. There are ways to make your credit score better and avoid making late payments. If possible, make sure to pay your past due bills on time. While it won't erase past late payments, it can increase your payment history.
Multiple credit cards
While having several credit cards can help you raise your credit score significantly, it is important to be aware of the potential 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. This could not only lower your credit limit, but also hurt your credit score. It is better to limit your credit card balances to one or two. So you only have to use them when you need them.
Credit history that is long
The length of your credit history is an important factor in your credit score. This is because your score will increase the longer you have credit history. Another factor is how many accounts you have. A longer history means that you are less likely not to miss payments. While closing old accounts will reduce your credit history's length, it will not lower your average age. Your credit score will also depend on the age of the last account.
Having a good payment history
Your payment history plays a major role in determining your credit score. Paying your bills on time will lead to a higher credit score. Late payments can harm your score. Remember that late payments on older accounts are less important than those from recent years.
Keep track your debt
Credit repair is only possible if you keep track of your debt. Your credit utilization is the basis of a third your FICO score. If your debt is too high, you may have to reduce the amount you borrow to improve your score.