What factors affect a credit rating?
Many different formulas are used to calculate a credit rating but most are based on the following factors:
Payment history
Basically how you have managed your various payments in the past. Records of late payments on your current and past credit accounts will lower your credit rating.
Public records
Public records such as bankruptcies, judgments, and collection items may lower your credit rating.
Amount of money you owe and the amount of available credit
Owing too much will lower your credit rating, especially if you're approaching your total credit limit.
Length of credit history
Generally a longer credit history is better for a better credit rating.
New accounts
Opening multiple new accounts in a short period of time may lower your credit rating.
Searches
Whenever someone else gets your credit report e.g. a lender, landlord, or insurer, a search is recorded on your credit report. A large number of recent searches may lower your credit rating.
Accounts in use
The existence of too many open accounts can lower your credit rating, whether you're using the accounts or not.
