There are a lot of common things which lower a person’s credit score by a lot. These things are – credit utilization, payment history, length of the credit history, credit mix, and more. In this article, I will be discussing about 5 factors that could lead to a lowered credit history.
5 Things That Might Be Lowering Your Credit Score Drastically
Here is a list of the top 5 things that may be causing your credit score to be lowered significantly:
1. Few Types Of Credit
The remaining ten percent of your FICO score is majorly based on the types of credit that you use – like auto loans, credit cards, personal loans, and auto loans. If you have only a certain type of credit then that is going to have a very negative impact on your overall score.
2. You Owe Too Much
About another thirty percent of your FICO score is also based on the amount of percentage that you owe. This puts a limit on your credit cards. If you have more than thirty percent of credits due then just altogether forget about getting any credit at all.
3. Missed/Late Payments
The history of your payments plays a huge role in determining your credit score. It also additionally accounts for 35% of your FICO score as well. If there are a lot of due payments on your credit history then that could backfire on you.
4. Overbearing Requests Of New Line Of Credit
Your score of FICO does not take into consideration any of the consumer-initiated or even promotional inquiries – which are popularly known as soft inquiries.
5. Very Thin History Of Credit
The length of your history of credit also plays a very crucial role when calculating the score of FICO. The lenders like to see long credit histories as that shows you are going to have no problems repaying your debts in the future.
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