What Affects Your Credit Score, and What Doesn’t
Photo Credit: Adobe Stock
Because companies use your credit score to decide whether to loan you money or offer you a credit card and what interest rate they will charge, it’s important to know what goes into compiling your credit score.
Businesses use different formulas to create a credit score from your borrowing and payment history. The higher your credit score, the more likely you will get a loan and pay a lower interest rate.
Your credit score can also affect your ability to buy affordable insurance.
According to the Consumer Financial Protection Bureau, a typical credit score evaluates:
- Bill-paying history;
- Current unpaid debt;
- The number and type of loan accounts you have;
- How long you have had your loan accounts open;
- How much of your available credit you are using;
- New applications for credit; and
- Whether you have had debt sent to a collection agency, had a foreclosure or filed bankruptcy and how long ago.
Factors that improve your credit score are paying your bills on time, not borrowing too much or maxing out your credit cards, a proven track record of managing your debt, not opening a lot of new accounts in a short period, and having a variety of credit cards and loans when you do use credit to finance purchases.
Some things that do not affect your credit score are:
- The amount of your income,
- Your education level,
- The amount of money in your bank accounts,
- Overdrafts in your checking account, and
- Carrying a balance on your credit card, so long as you’re making timely payment. However, the overall amount of your debt can affect your ability to borrow more money, regardless of credit score.
It is a good practice to check your credit report each year through www.annualcreditreport.com to ensure that the information being used to compile your credit score is accurate. You are entitled by law to one free credit report a year from each of the three nationwide consumer credit reporting companies.
When an accident happens – Morrow, Gates and Morrow are here to help.
If you or a loved one are injured in any type of accident, you should get legal help immediately. The attorneys at Morrow, Gates and Morrow have the experience to make sure your rights are protected and that you get the compensation you deserve.
Our Personal Injury Attorneys
Contact us right away by phone (337) 942-6529 after any personal injury. Morrow, Gates & Morrow, LLC. can review your case and help you get compensated and hold the other party responsible.
If you have been in an accident, do not hesitate to get help.
Monday - Thursday: 8:30 a.m. - 5 p.m.
Friday: 8:30 a.m. - 12 p.m.
Saturday & Sunday: closed
We represent clients in all of Louisiana as well as other states including, but not limited to Texas, Mississippi, Alabama and Florida
Legal Disclaimer: The content of Morrow, Gates and Morrow LLC’s website is for informational purposes only. Do not construe the content and information of this website to be legal advice. Morrow, Gates & Morrow does not promise or guarantee any result for services rendered.
The blog posts from Morrow, Gates & Morrow consist of hypothetical scenarios, opinions and generic information. These scenarios are in no way meant to assess blame on any party in real-life situations and are presented for informational purposes only.