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5 Factors That Affect Your Credit Score



5 Factors That Affect Your Credit Score

Various factors can affect credit scores. The lenders take reference using the credit score so that they know for sure if, given the borrower’s credit history, they will be able to pay back the loan.

A good credit score will be 750 or above, and it shows how timely you are paying your dues.

Here are some factors that affect the credit score:

Payment history:

Payment history shows how you have been dealing with your finances and how good your credit score is. When you ask for a loan, the first question that comes to a lender’s mind is if you can repay the amount in time.

That’s when they check your creditworthiness to know if you can repay the dues on time.

There is a history of your credit card and loan payments. The CIBIL score and report also show how late you have been making your payments or your payment mode.

It will help the lender understand your ability to make payments on time.

Tenure of credit history:

Before you take out a loan, the oldest account and the new accounts are considered to understand your overall credit history.

You can check your CIBIL score and report online and see the history.

The tenure of credit history helps in giving perspective to the lenders to understand your financial stability and your payment times.

Credit utilization ratio and the debts owed by you:

Various things make up your credit score, like when you make your payments, how you make your payments, how many debts you have, and much more.

The credit utilization ratio helps in understanding your creditworthiness, and it also shows how much debt you are in.

You can do a CIBIL score check for free online, which will help you understand your credit history properly.

When it comes to credit utilization ratio, then less is better like if your credit card allows you a limit of 5 lakhs, then try to limit your credit utilization ratio to 30%. You can use the credit a little but make sure that you are able to pay it back on time.

New credit:

The new credits that you take also affect your credit score. Your credit report will include all the information, like the timeline of accounts you opened, the latest account, and much more.

So whenever you apply for any loan, then the lender will go through the credit information and then move forward with your loan.

Credit mix:

Credit mix is the type of credit you own, like credit cards, store accounts, installment loans, and much more.

These are some important factors that build your credit score. You can see the percentage of the credit mix in your report.

So do not worry if you don’t have any accounts in these categories.


Doing a credit score check is easy to understand your report and get all the information. You should maintain your credit score if you want to get your loan easily without any hassles because various factors affect the CIBIL score.

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