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What Impacts Your Credit Score?

 
Establishing a good credit score reputation can be challenging, but knowing the things or behaviors that may impact your credit score is a good place to start. We have listed some behaviors that typically impact your overall credit score.
 
Late payments
 
Late payments on any of your bills can negatively impact your credit score and impact your future borrowing potential. Inability to pay bills on time signals to potential lenders that the borrower is unable to fulfill current debt responsibilities and may be unable to meet the demands of new debt. According to Equifax, your payment history accounts for approximately 35 percent of your credit and is the largest factor for determining your score.
 
Bankruptcies, tax liens, and public records
 
Having a bankruptcy, tax lien or any sort of public record (judgments) will not only impact your overall score but will also show on your credit reports. A paid or released tax lien can still remain on your credit history file for 10 years from the date released (Equifax, 2017).
 
High revolving debt balances or utilization

Per Experian, the best way to remedy revolving debt is to pay those current accounts down and only use your current credit cards for routine expenses each month. Closing all of those accounts may not be wise as you will still need established credit. Therefore, it's important to have a few accounts open for routine expenses.
 
Large number of open accounts

According to Equifax, one of the biggest contributing factors to your credit score is the amount owed across each of your accounts. For a lender, seeing a lot of open accounts signals that there is a lot of debt already accumulated by the potential borrower. It may be a good idea to pay off and close some of those accounts that you find are ultimately hurting your financial health.