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What Affects Your Credit Score - Learn What to Watch out For

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By : Matthew Wierzbinski    99 or more times read

There are a few major things on your credit report that primarily affect your credit score, but let's first discuss the things that don't affect your credit score.

  • Your bank account has no effect on your credit score (except when you bounce checks and they turn into collections).

  • Your payment of your household bills does not affect your credit score (unless you donít pay the bills and they turn into collections).

  • The payment of your insurance does not affect your credit score.

  • The payment of your rent doesnít affect your credit score (except when you violate your lease and that becomes a collection or judgment).

  • Payment of medical bills does not affect your credit score (except when you donít pay them and they turn into collections).

What affects your credit score is any item reporting on your credit report. Any loans and credit cards on your report affect your score. Some banks (especially smaller) do not report to the credit bureaus and loans that don't report to them donít help your credit score. Any late payments that are 30 days or more on your credit report have a highly negative effect on your credit score. If you get 60 or 90 days late, your credit score will take a very long time to recover.

The balances you carry on your credit report are also what affect your credit score. Carrying high balances in relation to the card's credit limit will negatively affect your score. You should avoid carrying a balance over 30% of the credit limit. If you have balances over 30%, you should pay them down.

Especially if you don't have a lot of credit, new credit will greatly impact your score. If your overall credit history is pretty short, taking on a new car loan will lower your score. After you have made payments on the loan for 6 months, those on-time payments will start improving your credit score, but to begin with, your score will drop.

When it comes to getting a handle on your credit score, it can really help to know some things about what affects your credit score and what doesn't.

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