Factors affecting credit scores in the United States
Credit Utilization Ratio/Amounts Owed: Credit Utilization Ratio refers to the ratio of the amount used by a credit card to the total amount owed. Excessive utilization of credit limits can lower credit scores. Generally speaking, the utilization rate of credit limit needs to be controlled within 30%.
Credit History/Payment History: Your credit history refers to your past credit behavior, including whether you have repaid on time, whether you have any outstanding debts, etc. If you have a history of overdue repayments or debts, it may lower your credit score.
Credit Mix: Credit mix refers to the types of credit products you offer, including credit cards, loans, mortgages, and more. Having multiple types of credit products can improve your credit score.
Length of Credit History: The length of credit history refers to the length of time you have held a credit account. The longer the credit history, the higher the credit score is usually.
New Credit Account: Frequent application for a new credit account may be considered a financial crisis and may result in a decrease in credit score.
Credit Investigations: Refers to the number of times financial institutions check your credit history. Frequent checking of credit records can lower your credit score. Although you can control the number of records you check yourself, you cannot control how others may check your credit report, such as when the bank checks your credit record when you apply for a credit card or loan.
