What Factors Influence Your Credit Score?

 

If you’re shopping for new vehicles in Silver Spring, MD or a nearby area, you needn’t look beyond our location to find a brand-new car that appeals to you. We have a generous selection of new automobiles that are feature-rich, nice-looking, and reliable, and we’ll be happy to show all of them to you.

In recent blog posts, we’ve explained what you’ll need to have with you when you apply for vehicle financing and we’ve discussed how you can apply for financing if you have bad or no credit. We’re thrilled those posts have instilled confidence in motorists when they apply for financing through our car dealership near Columbia, MD.

If you have poor credit, you’re probably curious about what you can do to improve your credit score. To improve your score, you have to know what influences your credit score. In general, your credit score is calculated based on five factors, which include the following:

·        Payment History: Your payment history accounts for approximately 35 percent of your score, so be sure you pay your debts on time.

·        Utilization: Utilization refers to the balance-to-limit ratio you maintain on your revolving installment accounts. Ideally, your overall utilization rate, as well as the utilization rates for each of your revolving accounts, should be less than 10 percent.

·        Length of Credit History: Length of credit history refers to the amount of time you’ve had debt accounts.

·        Recent Activity: When looking at your recent activity, a credit reporting agency will examine the number of times you’ve applied for credit in the past three to six months, your new credit inquiries, and whether you’re paying your debts off or assuming more debt.

·        Overall Capacity: This factor is simply the total amount of debt you’re currently carrying. Your mortgage, credit cards, student loans, and car loan are all included in your overall capacity.

To learn more about how your credit score is calculated, contact Fresh Start Program today!

Categories: Finance