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What are the factors impacting my credit score?

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A good credit score is essential because a person’s credit worthiness is represented by it and also it determines the probability of getting a loan in the future.

Therefore it is very important to know the factors that impact it. Credit scores are affected by the factors listed below: 1) Repayment history - All bills and loan repayment should have been repaid within the contractual dates stipulated. Even a single default can have a negative impact on the score. 2) Credit utilization - The credit utilization ratio is basically calculated on the balance outstanding on all your credit cards as a percentage of all your credit card’s limits. 3) Length of your credit history - Longer the time you have been servicing credit, the more it has a positive impact on your credit score. 4)New Credit - Every time you apply for a new credit, the banks run an enquiry on your credit report. If there are too many enquires it may have a negative impact on your credit score. 5)Mix of credit - There should be a healthy mix of credit – unsecured & secured loans, personal, mortgage loans etc..

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