Thursday, 17 April 2014

WHAT ELEMENTS IMPACT CREDIT SCORES

ELEMENTS THAT IMPACT CREDIT SCORES

LATE PAYMENTS

Your payments history accounts for nearly thirty five percent of your credit score calculation.Make late payments will adversely hurt your credit score.Always pay your monthly credit card dues on time to keep your credit score in the excellent range

MISSING PAYMENTS

Not making payments at all on your credit card bills can damage your credit score to a great extent.Every month when you miss your credit card payment you are getting a step closer to having your account charged off.

ACCOUNT CHARGE OFF

When you miss making your credit card payments every month,the creditors think that

you are not going to pay your dues at all and they get your account charged off.An account charge off can drastically bring down your credit score and put you in the bad credit score category.

ACCOUNT FORWARDED TO THE COLLECTIONS DEPARTMENT

The creditors usually hire collection agencies to collect payment from cardholders who have not being making payments of their dues despite regular reminders.The creditors might send your account to the collections department even before it is charged off.An account showing collection status impacts a credit score negatively.

FILING BANKRUPTCY

Bankruptcy can completely destroy your credit score.It is better to look for alternatives before planning to file for bankruptcy.

HOME FORECLOSURE

Lagging behind on mortgage payments will result in the lender foreclose your home.The late payments on your mortgage will hurt your credit score badly and make it difficult for you to get approval for mortgage loans in the future.

CLOSING OLD CREDIT CARD ACCOUNTS

A very important factor that is taken into consideration when calculating your credit score is the length of your credit history.The longer your credit jistories the better it is for your credit score.Closure of old and oldest credit cards accounts will make your credit histories seem shorter than it is.This can hurt your credit score badly.

APPLYING FOR TOO MANY CREDIT CARD ACCOUNTS OR LOANS

Nearly 10% of your credit enquiries account for your credit score calculation.Applying for too many credit cards or loans with a short span of time can hamper your credit score.Try to keep applications to a minimum.