Your credit score is one of the most important aspects of your financial well-being. It helps lenders understand your creditworthiness, affecting how easy it is to get a mortgage, student loan, auto note, etc.
Both installment credit and revolving lines of credit can affect your score. The same goes for monthly household bills like utilities and Internet. The cash advance impact on credit score figures is minimal. But failing to pay your advance back can lead to problems. Any bill provider or lender can report late payments, and any judgments against you due to non-payment can ruin your credit. Understanding cash advance impact on credit score? Visit this website for expert insights!
Here are the most critical factors that impact your credit score.
Payment History
One of the biggest factors that can make or break your credit score is your payment history. In other words, it's how on top of your bills you are! Missed payments can dramatically lower your score. Those dings can stay on your report for up to seven years, making lenders hesitant to give you money.
Your payment history accounts for about 35 percent of your score.
Totals Owed
Also known as credit utilization, this factor revolves around how much of your credit you use. For example, say that you have a credit card with a limit of $10,000. If you use up $5,000 of that limit, your credit utilization ratio is 50 percent.
Typically, using more than 30 percent of your credit will negatively impact your credit score.
Credit Mix
A mix of credit accounts can increase your score because it shows lenders you have experience managing your money. The more diverse your credit portfolio, the better. The cash advance impact on credit score is minimal because of how quickly you repay those loans. But a mix of auto loans, credit cards and mortgages can increase your score.
New and Recent Credit
This factor refers to how many hard inquiries into your credit score you have. If you apply for several credit cards at one time, it indicates increased risk. When applying for a loan, always prequalify with a soft inquiry before going through the application process to keep this figure low.
Length of Credit History
Finally, your credit history plays an important role in your overall score. The longer you have credit, the higher your score because it shows you know how to manage your debt.
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