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