you've ever borrow to use a credit card or take advantage of an offer "buy now, pay later " you have what is called a history of credit. It is very important to have a good track record in terms of credit . Otherwise , a lender may refuse to grant you a loan, or rent an apartment , for example. You may also not be able to get a mortgage to buy a new home. And if a lender agrees to fund you despite your bad history of credit , this will usually be at a higher interest rate . What factors have an impact on your credit score? The credit reporting agencies or credit bureaus, and lenders use a mathematical formula to determine your credit score. This formula takes into account various factors included in your credit report (PDF ), including: • your payment history ( have you ever failed to make a payment to repay your debts ?) • recovery action or bankruptcy ( happened to a collection agency must receive payment of an invoice that you have not paid you ever declared bankruptcy ? ) • your existing debts (which is your credit limit balances your lines of credit and credit cards are they similar to your credit limits ?) • the account history ( how long have you had credit ?) • the number of recent inquiries made about your credit report (how many times do we have accessed your credit file ?) • the type of credit you use ( you only credit cards or do you have a combination of credit cards and loans ? ) . These factors do not all have the same importance when it comes to establishing your credit score. The most important factors are your payment history , your history in terms of bankruptcy and the current balance of your credits and loans. Additional information such as information about your mortgage and personal inquiries can be included in your credit report , but they usually do not affect your credit score.
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