Earning points and miles through lucrative credit card bonuses can open up some amazing travel options. But to really work this hobby to your advantage, you need to have a solid credit score.
Let’s take a look at eight factors that you may not even realize can influence your credit score.
Payment history
Payment history is more important than any other information on your credit report when your credit score is calculated. It’s worth 35% of your FICO score. With VantageScore, your payment history matters even more, accounting for 41% of your credit score under the VantageScore 4.0 model.
The fact that your payment history matters so much isn’t surprising when you take a moment to consider the purpose of a credit score. Credit scores help lenders predict the likelihood that you’ll become at least 90 days late on a payment during the next 24 months.
If your reports show that you’ve done a good job keeping up with your credit obligations in the past, your credit score will almost certainly reflect your hard work.
Related: The complete history of credit cards, from antiquity to today
Missing payments
Because payment history is the number one factor in your credit score, it’s critical to make all of your payments on time every month. Even one 30-day-late payment has the potential to hurt your score. If you frequently make late payments or fall more than 30 days behind on a payment, the credit score drop could be severe.
Credit scoring models evaluate:
- Whether any late payments appear on your report
- How late those payments were (30 days, 60 days, 90 days, etc.)
- When the late payments took place (the more recent, the worse the score impact)
- How many late payments appear on your report
Daily Newsletter
Reward your inbox with the TPG Daily newsletter
Join over 700,000 readers for breaking news, in-depth guides and exclusive deals from TPG’s experts
Where credit cards are concerned, it’s best to pay your full statement balance every month. In fact, this is one of the ten commandments of travel rewards cards. But if you make a mistake and overspend, it’s still critical to pay at least your monthly minimum.
Automated payments can be a great backup system to save you from oversights. Most credit card issuers will let you schedule automatic payments either for the minimum amount due or your full statement balance. You can choose the option you prefer.
I’m a big fan of automatic payments on credit cards and other bills. However, I set an alarm on my smartphone to tell me to log into my accounts on the day my auto drafts are scheduled to verify that the payments were, indeed, successful.
Related: What to do if your credit card is delinquent — and how to prevent it from happening
Credit utilization
Your credit utilization ratio is nearly as influential as your payment history in terms of credit score importance. In fact, the relationship between your credit card limits and balances is responsible for 30% of your FICO score.
Say your credit report shows a credit card with a $10,000 limit and a $5,000 balance. In this example, your credit utilization ratio is 50%.
Why do credit scoring models care about credit utilization? It has to do with risk prediction. Statistics show that people who use bigger portions of their credit card limits are more likely to pay bills late.
The lower your utilization ratio, the lower your credit risk. So, lower credit utilization ratios generally lead to better credit scores. If you want a good credit score, you should pay your full statement balance each month (preferably before your account’s statement closing date).
Related: How credit scores work
Using too much available credit
As mentioned, your utilization ratio is equal to your credit card balance divided by your credit limit, converted to a percentage. When you use more of your available credit limit, your utilization rate starts to climb.
Building on the example above, imagine you charge an additional $2,500 on your credit card. However, you don’t pay down your balance (aside from the minimum payment). That move won’t be good for your credit score or your bank account.
The extra spending would cause your utilization ratio to jump from 50% up to 75% when your card issuer sends your updated account information to the credit bureaus — Equifax, TransUnion and Experian.
Under FICO’s credit scoring models, you should aim for a utilization ratio of less than 10%. People with the highest FICO scores have an average utilization ratio of 5% or less. VantageScore, on the other hand, recommends that you maintain less than 30% utilization on your credit card accounts.
A good way to keep your utilization levels low is by paying off your credit card before your statement closing date. Sometimes, banks will do you a favor by raising your credit limit. A higher limit may have the benefit of automatically lowering your utilization ratio.
Related: When is it time to ask for a credit limit increase?
Length of credit history
Your age does not have an impact on your credit score. The age of your accounts, on the other hand, is relevant. FICO bases 15% of your score on your length of credit history.
Some of the details FICO considers in this category include:
- The age of your oldest account
- The average age of accounts on your credit report
- How long it’s been since you have used the accounts on your credit report
Having older accounts works in your favor in this credit score category. But if you don’t want to sit back and wait for time to do its magic, you can ask a loved one to help you out.
Becoming an authorized user on a friend’s or relative’s credit card might increase your length of credit history and, by extension, your credit score. Just be sure that your loved one adds you to a credit card with a perfect payment history and a low credit utilization rate. Otherwise, being an authorized user might move your credit score in the wrong direction.
Related: Best first credit cards
New credit
When a financial institution pulls your credit score, a record known as an “inquiry” is added to your credit report. Most inquiries stay on your report for 24 months. Certain inquiries, known as “hard” inquiries, have the potential to damage your credit score for 12 months. (Tip: Checking your credit score and report will never hurt you.)
Studies show that people who apply for a lot of credit in a short period of time are riskier borrowers. In other words, they’re more likely to pay a credit obligation 90 days late in the following 24 months.
The logic is as follows: The more credit you apply for, the more it appears that you need money. If you apply for a lot of credit at once, it can make you look desperate for cash. This may raise a red flag with credit card issuers and other lenders.
Some people apply for numerous credit cards at once to accumulate a lot of points in a short period of time. This strategy can have negative implications for your credit score.
Sure, in the short term, you might accumulate a boatload of points. But is putting your credit score at risk really worth it? In my opinion, no. The benefits don’t outweigh the potential cost of a damaged credit score.
Credit card issuers have also begun to crack down on churners in recent years. Cards that were once easily attainable are now being denied because of too many applications in the 18-24 months prior to application. Chase’s 5/24 policy denies credit card applications if you’ve opened five or more credit cards in the previous 24 months. Other card issuers have rules that restrict sign-up bonuses.
The lesson: Be picky about which cards you open and use a smart credit card strategy.
Related: What is the difference between a hard and soft pull on your credit report?
Having multiple open accounts with balances
You might not realize that the number of accounts with balances on your credit report can impact your credit score. Limiting your number of outstanding balances is best from a scoring perspective.
For this reason, it can be helpful to start with your smallest balances and work your way upward when you’re trying to pay down debts (credit cards or otherwise). Consolidating multiple high-interest debts with a personal loan or a balance transfer credit card could help you in this area as well — not to mention it might save you money.
The number of accounts with balances isn’t a huge credit score factor. Still, it’s smart to pay attention to any steps you can take that might push your score in a positive direction.
Related: How to choose a balance transfer credit card
Credit errors
Credit reporting errors happen all too often. Consumer Reports recently released a study on credit report accuracy and found that nearly 50% of consumers had an error on at least one of their credit reports.
You can’t always prevent credit reporting errors from fraud or identity theft. You can’t control whether creditors report bad information to the credit bureaus. Some credit reporting errors, like mixed files, are even caused by the credit bureaus themselves. However, you can take steps to protect your credit and fix problems when they occur.
First, check all three of your credit reports — from Equifax, TransUnion and Experian — often. You’re entitled to a free report from each bureau every 12 months via AnnualCreditReport.com. When you download your reports, go through them line by line. Make a list of any mistakes. Even errors that seem minor might be relevant.
If you find errors, you can dispute them with the credit bureaus. According to the Fair Credit Reporting Act, the credit bureau has 30 days to investigate your dispute (45 days in certain cases). At the end of the investigation, the credit bureau must either verify that the item on your credit report is accurate or delete it. The Consumer Financial Protection Bureau provides a helpful guide to walk you through the dispute process.
Additionally, if you want to lower the chance of someone opening a fraudulent account in your name, consider freezing your three credit reports. You can freeze your credit for free and it will block future lenders from accessing your credit information. When you want to apply for legitimate credit in the future, you’ll need to “thaw” your credit reports first. Although thawing your credit before new applications requires an extra step, it’s well worth it for the added protection against this type of fraud.
Related: How to check your credit score for free
Bottom line
Your credit score matters. Good credit can save you thousands of dollars throughout your life. Good credit may also help you to qualify for attractive offers from lenders, such as premium travel rewards credit cards.
If you currently have less-than-stellar credit, don’t despair. There are still some travel rewards cards that you might qualify for with low credit scores. In the meantime, keep a close eye on your credit reports, avoid the mistakes outlined above and study additional ways to improve your credit for the future. Staying on top of your payments can bring an excellent credit score within reach.
Related reading
ADVERTISEMENT:
Hello, para pencinta slot! Pernah mendengar istilah “raja slot? Kalau tidak, siap-siap jatuh cinta dengan konsep ini. slot gacor merupakan mesin slot yang selalu memberi win. Ya, mesin-mesin ini bisa disebut sebagai jagoannya buat bawa come back hasil. any way, gimana sih
tekniknya jumpain slot demo yang benar? Santuy Bro, kita bahas santai aja di tempat ini
Permainan terpopuler waktu ini hanya satu berada Indonesia yaitu pasti menyediakan return terbesar
Daftarkanlah dengan di :
Informasi mengenai KING SLOT, Segera Daftar Bersama king selot terbaik dan terpercaya no satu di Indonesia. Boleh mendaftar melalui sini king slot serta memberikan hasil kembali yang paling tinggi saat sekarang ini hanyalah KING SLOT atau Raja slot paling gacor, gilak dan gaco saat sekarang di Indonesia melalui program return tinggi di kingselot serta pg king slot
slot demo gacor
slot demo gacor permainan paling top dan garansi imbal balik hasil besar bersama kdwapp.com
akun demo slot gacor
akun demo slot gacor permainan paling top dan garansi imbal balik hasil besar bersama kdwapp.com
akun slot demo gacor
akun slot demo gacor permainan paling top dan garansi imbal balik hasil besar bersama kdwapp.com
akun demo slot pragmatic
akun demo slot pragmatic permainan paling top dan garansi imbal balik hasil besar bersama kdwapp.com
akun slot demo pragmatic
akun slot demo pragmatic permainan paling top dan garansi imbal balik hasil besar bersama kdwapp.com
akun slot demo
akun slot demo permainan paling top dan garansi imbal balik hasil besar bersama kdwapp.com
akun demo slot
akun demo slot permainan paling top dan garansi imbal balik hasil besar bersama kdwapp.com
slot demo gacor
slot demo gacor permainan paling top dan garansi imbal balik hasil besar bersama jebswagstore.com
akun demo slot gacor
akun demo slot gacor permainan paling top dan garansi imbal balik hasil besar bersama jebswagstore.com
akun slot demo gacor
akun slot demo gacor permainan paling top dan garansi imbal balik hasil besar bersama jebswagstore.com
akun demo slot pragmatic
akun demo slot pragmatic permainan paling top dan garansi imbal balik hasil besar bersama jebswagstore.com
akun slot demo pragmatic
akun slot demo pragmatic permainan paling top dan garansi imbal balik hasil besar bersama jebswagstore.com
akun slot demo
akun slot demo permainan paling top dan garansi imbal balik hasil besar bersama jebswagstore.com
akun demo slot
akun demo slot permainan paling top dan garansi imbal balik hasil besar bersama jebswagstore.com
slot demo gacor
slot demo gacor permainan paling top dan garansi imbal balik hasil besar bersama demoslotgacor.pro
akun demo slot gacor
akun demo slot gacor permainan paling top dan garansi imbal balik hasil besar bersama demoslotgacor.pro
akun slot demo gacor
akun slot demo gacor permainan paling top dan garansi imbal balik hasil besar bersama demoslotgacor.pro
akun demo slot pragmatic
akun demo slot pragmatic permainan paling top dan garansi imbal balik hasil besar bersama demoslotgacor.pro
akun slot demo pragmatic
akun slot demo pragmatic permainan paling top dan garansi imbal balik hasil besar bersama demoslotgacor.pro
akun slot demo
akun slot demo permainan paling top dan garansi imbal balik hasil besar bersama demoslotgacor.pro
akun demo slot
akun demo slot permainan paling top dan garansi imbal balik hasil besar bersama demoslotgacor.pro
slot demo gacor
slot demo gacor permainan paling top dan garansi imbal balik hasil besar bersama situsslotterbaru.net
akun demo slot gacor
akun demo slot gacor permainan paling top dan garansi imbal balik hasil besar bersama situsslotterbaru.net
akun slot demo gacor
akun slot demo gacor permainan paling top dan garansi imbal balik hasil besar bersama situsslotterbaru.net
akun demo slot pragmatic
akun demo slot pragmatic permainan paling top dan garansi imbal balik hasil besar bersama situsslotterbaru.net
akun slot demo pragmatic
akun slot demo pragmatic permainan paling top dan garansi imbal balik hasil besar bersama situsslotterbaru.net
akun slot demo
akun slot demo permainan paling top dan garansi imbal balik hasil besar bersama situsslotterbaru.net
akun demo slot
akun demo slot permainan paling top dan garansi imbal balik hasil besar bersama situsslotterbaru.net
situs slot terbaru
situs slot terbaru permainan paling top dan garansi imbal balik hasil besar bersama situsslotterbaru.net
slot terbaru
slot terbaru permainan paling top dan garansi imbal balik hasil besar bersama situsslotterbaru.net
elangwin88 permainan paling top dan garansi imbal balik hasil besar bersama elangwin88.me
eyangslot88 permainan paling top dan garansi imbal balik hasil besar bersama eyangslot88.biz
fendi88 permainan paling top dan garansi imbal balik hasil besar bersama fendi88.asia
gaco888 permainan paling top dan garansi imbal balik hasil besar bersama gaco888.net
gacoan888 permainan paling top dan garansi imbal balik hasil besar bersama gacoan888.biz
gacor666 permainan paling top dan garansi imbal balik hasil besar bersama gacor666.biz
gambar88 permainan paling top dan garansi imbal balik hasil besar bersama gambar88.org
gameboy777 permainan paling top dan garansi imbal balik hasil besar bersama gameboy777.com
ganas88 permainan paling top dan garansi imbal balik hasil besar bersama ganas88.me
gasing77 permainan paling top dan garansi imbal balik hasil besar bersama gasing77.asia
gasing88 permainan paling top dan garansi imbal balik hasil besar bersama gasing88.info
geber888 permainan paling top dan garansi imbal balik hasil besar bersama geber888.net
gemoy77 permainan paling top dan garansi imbal balik hasil besar bersama gemoy77.live
gercep888 permainan paling top dan garansi imbal balik hasil besar bersama gercep888.asia
giga333 permainan paling top dan garansi imbal balik hasil besar bersama giga333.live
happybet88 permainan paling top dan garansi imbal balik hasil besar bersama happybet88.asia
harum88 permainan paling top dan garansi imbal balik hasil besar bersama harum88.live
heroslot888 permainan paling top dan garansi imbal balik hasil besar bersama heroslot888.info
jejuslot88 permainan paling top dan garansi imbal balik hasil besar bersama jejuslot88.co
kenzo88 permainan paling top dan garansi imbal balik hasil besar bersama kenzo88.me
kerangwin88 permainan paling top dan garansi imbal balik hasil besar bersama kerangwin88.com
kijangwin88 permainan paling top dan garansi imbal balik hasil besar bersama kijangwin88.asia
kingdomtoto4d permainan paling top dan garansi imbal balik hasil besar bersama kingdomtoto4d.asia
kingdomtoto77 permainan paling top dan garansi imbal balik hasil besar bersama kingdomtoto77.asia
king selot permainan paling top dan garansi imbal balik hasil besar bersama kingselot.com
king slot permainan paling top dan garansi imbal balik hasil besar bersama kingslot.bio
king slot permainan paling top dan garansi imbal balik hasil besar bersama kingslot.com
kingselot permainan paling top dan garansi imbal balik hasil besar bersama kingselot.com
kuta88 permainan paling top dan garansi imbal balik hasil besar bersama kuta88.asia
ladangtoto88 permainan paling top dan garansi imbal balik hasil besar bersama ladangtoto88.asia
ligaciputra88 permainan paling top dan garansi imbal balik hasil besar bersama ligaciputra88.asia
mabar888 permainan paling top dan garansi imbal balik hasil besar bersama mabar888.info
mamen88 permainan paling top dan garansi imbal balik hasil besar bersama mamen88.info
mami88 permainan paling top dan garansi imbal balik hasil besar bersama mami88.live
maniaslot88 permainan paling top dan garansi imbal balik hasil besar bersama maniaslot88.pro
mantra888 permainan paling top dan garansi imbal balik hasil besar bersama mantra888.asia
mawartoto4d permainan paling top dan garansi imbal balik hasil besar bersama mawartoto4d.pro
maxwin888 permainan paling top dan garansi imbal balik hasil besar bersama maxwin888.pro
mega88 permainan paling top dan garansi imbal balik hasil besar bersama mega88.org
mekar999 permainan paling top dan garansi imbal balik hasil besar bersama mekar999.asia
milan96 permainan paling top dan garansi imbal balik hasil besar bersama milan96.asia
olxtoto77 permainan paling top dan garansi imbal balik hasil besar bersama olxtoto77.asia
olxtoto88 permainan paling top dan garansi imbal balik hasil besar bersama olxtoto88.life
panen4d permainan paling top dan garansi imbal balik hasil besar bersama panen4d.asia
pisang88 permainan paling top dan garansi imbal balik hasil besar bersama pisang88.org
planet7777 permainan paling top dan garansi imbal balik hasil besar bersama planet7777.com
prediksi777 permainan paling top dan garansi imbal balik hasil besar bersama prediksi777.live
prediksi88 permainan paling top dan garansi imbal balik hasil besar bersama prediksi88.asia
preman88 permainan paling top dan garansi imbal balik hasil besar bersama preman88.asia
preman96 permainan paling top dan garansi imbal balik hasil besar bersama preman96.asia
premium88 permainan paling top dan garansi imbal balik hasil besar bersama premium88.asia
prima88 permainan paling top dan garansi imbal balik hasil besar bersama prima88.live
kingselot permainan paling top dan garansi imbal balik hasil besar bersama kingselot.com
rajaslotjp88 permainan paling top dan garansi imbal balik hasil besar bersama rajaslotjp88.com
roma88 permainan paling top dan garansi imbal balik hasil besar bersama roma88.asia
salju888 permainan paling top dan garansi imbal balik hasil besar bersama salju888.asia
semutwin88 permainan paling top dan garansi imbal balik hasil besar bersama semutwin88.info
king slot.com permainan paling top dan garansi imbal balik hasil besar bersama kingselot.com
sultan777 permainan paling top dan garansi imbal balik hasil besar bersama sultan777.asia
sultan888 permainan paling top dan garansi imbal balik hasil besar bersama sultan888.asia
sultan99 permainan paling top dan garansi imbal balik hasil besar bersama sultan99.asia
super333 permainan paling top dan garansi imbal balik hasil besar bersama super333.live
suster12 permainan paling top dan garansi imbal balik hasil besar bersama suster12.com
tokekwin88 permainan paling top dan garansi imbal balik hasil besar bersama tokekwin88.info
tokyo777 permainan paling top dan garansi imbal balik hasil besar bersama tokyo777.info
tumi88 permainan paling top dan garansi imbal balik hasil besar bersama tumi88.live
vioslot88 permainan paling top dan garansi imbal balik hasil besar bersama vioslot88.asia
dora777 permainan paling top dan garansi imbal balik hasil besar bersama dora777.asia
dp88 permainan paling top dan garansi imbal balik hasil besar bersama dp88.biz
fila888 permainan paling top dan garansi imbal balik hasil besar bersama fila888.org
gaco888slot permainan paling top dan garansi imbal balik hasil besar bersama gaco888slot.com
gadunslot88 permainan paling top dan garansi imbal balik hasil besar bersama gadunslot88.asia
gagah88 permainan paling top dan garansi imbal balik hasil besar bersama gagah88.info
gaskan888 permainan paling top dan garansi imbal balik hasil besar bersama gaskan888.biz
gatotkaca88 permainan paling top dan garansi imbal balik hasil besar bersama gatotkaca88.info
gemoy888 permainan paling top dan garansi imbal balik hasil besar bersama gemoy888.biz
gemoy888slot permainan paling top dan garansi imbal balik hasil besar bersama gemoy888slot.info
gocap888 permainan paling top dan garansi imbal balik hasil besar bersama gocap888.net
god777 permainan paling top dan garansi imbal balik hasil besar bersama god777.biz
hari888 permainan paling top dan garansi imbal balik hasil besar bersama hari888.biz
hermes88 permainan paling top dan garansi imbal balik hasil besar bersama hermes88.biz
holywin999 permainan paling top dan garansi imbal balik hasil besar bersama holywin999.com
indojaya88 permainan paling top dan garansi imbal balik hasil besar bersama indojaya88.org
indomaster88 permainan paling top dan garansi imbal balik hasil besar bersama indomaster88.asia
jablay88slot permainan paling top dan garansi imbal balik hasil besar bersama jablay88slot.net
janjigacor88 permainan paling top dan garansi imbal balik hasil besar bersama janjigacor88.net
jeniustoto88 permainan paling top dan garansi imbal balik hasil besar bersama jeniustoto88.com
jeniustoto88slot permainan paling top dan garansi imbal balik hasil besar bersama jeniustoto88slot.com
juara88 permainan paling top dan garansi imbal balik hasil besar bersama juara88.info
juara88slot permainan paling top dan garansi imbal balik hasil besar bersama juara88slot.org
jwtogel88 permainan paling top dan garansi imbal balik hasil besar bersama jwtogel88.net
kasih88 permainan paling top dan garansi imbal balik hasil besar bersama kasih88.info
kawantogel88 permainan paling top dan garansi imbal balik hasil besar bersama kawantogel88.com
kawantogel88 permainan paling top dan garansi imbal balik hasil besar bersama kawantogel88.net
kedai88 permainan paling top dan garansi imbal balik hasil besar bersama kedai88.asia
king9999 permainan paling top dan garansi imbal balik hasil besar bersama king9999.org
kkslot88 permainan paling top dan garansi imbal balik hasil besar bersama kkslot88.info
kongsi888 permainan paling top dan garansi imbal balik hasil besar bersama kongsi888.com
kutu88slot permainan paling top dan garansi imbal balik hasil besar bersama kutu88slot.com
liga899 permainan paling top dan garansi imbal balik hasil besar bersama liga899.org
lisboa777slot permainan paling top dan garansi imbal balik hasil besar bersama lisboa777slot.com
