Your credit score is a factor that is currently being considered for making so many decisions. Therefore, a good or bad score can proportionally affect your life now and in the future in unimaginable ways. Right from the interest that would be paid on various loans and credit card bills to decisions on whether a place would be rented out to you, a lot depends on the credit score. So, it is only common sense that you are aware of the factors affect your credit score. Make sure it stays on the positive end at all times. Some of the most important factors which affect your credit score are as follows:

Debt Level
Of all the common factors that affect credit score,the level of debt one holds will have and impact of about 30%. Several factors related to your debt are accounted while making the credit scoring calculation like the FICO score. These factors include the credit utilization, which is the ratio of credit card balances to the credit limit, the amount of overall debt, and the relation between the loan balances and the original loan amount. Ideally, credit card utilization should be 30% or less. This is to say that it is ideal to charge not more than 30% of your card’s available limit.

Payment History
The next common factor that affects credit score bill payment history. It occupies about 35% area in your credit score calculations. So, the timeliness seen in the payment of all your bills can affect your credit score more than most factors. Major problems with this factor show up in the form of bankruptcy, tax liens, foreclosure, collections, charge-offs. However, once they do show up, they affect the credit score pretty badly and can place your chances of obtaining anything needing a good score on a seat that’s next to impossible.

Credit History Age
Around 15% of the credit score depends on the age of your credit. This factor takes both the age of the oldest account and the average age of all your accounts into consideration. The older your credit age, the better it is for your credit score as it depicts experience in handling credit. Therefore, it is not advisable to open up multiple new accounts in a short period.

Number of Credit Inquiries
Applications requiring credit checks would place an inquiry on your credit report that informs about the credit-based application you’ve made. These inquiries make up 10% of the common factors that affect credit score. While one or two inquiries can cause no damage, too many of them in a short period can lead to a substantial decrease in credit score.

Type of Credit
The presence of the two types of credit accounts in your credit report is better for your credit score: installment loans and revolving accounts. This indicates that you have more experience in managing various types of credit. A variety in the kinds of loans in terms of the assets it’s taken against, a house, a car, or an educational, can also be beneficial. Types of credit seen in your report constitute about 10% of credit score calculation.