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Improving your credit can be a lot easier than you may think! There are six factors in determining credit health, starting with high impact factors, and ending with low impact factors.

High Impact Factors

  1. Payment History – Payment history is simply making your payments on time. Doing this is the most important factor of your credit health. One late payment can lower your score immensely. I suggest setting up all of your accounts on autopay.  If for some reason your creditor does not have autopay, set a reminder in your calendar or on your phone.
  2. Credit Card Utilization – Credit card utilization reflects how much of your credit limit you are using. This has a huge impact on your credit scores. If you are maxing your credit cards out monthly, that will lower your scores very quickly. The good news is that when you pay that debt off, or down, your credit scores will rise just as quickly. It’s great if you can keep your credit utilization under 29%, and even better if you can keep it under 9%.  Anything over 50% will lower your score, and anything over 75% will significantly impact your credit score.
  3. Derogatory Marks – Derogatory marks can include collections or public records. Anything over four derogatory marks can significantly lower your score. Receiving one to three (1-3) of these marks, will result in the lowering of your score.  So try to pay all bills on time, and not let them be sent to collections.


Not all factors are considered equally by credit rating agencies.


Medium Impact Factors

  1. Age of Credit History – Lenders typically like to see that you have experience using credit responsibly. The credit bureaus take all of your open lines of credit, and compile an average of  length of time that they have been open. If your average is seven years or more, that is helpful in improving your score, whereas anything less than two years, can be detrimental. If you pay off a  credit card,  do not close that card. Keep it open, and at a zero balance. This will help the age of your credit overtime.


Low Impact Factors

  1. Total Accounts – The credit bureaus actually like to see a lot of open lines of credit on your report. These can be home loans, auto loans, credit cards etc. If you have 11 or more open accounts, that demonstrates good credit health, but again, this will have a low impact on your overall score.
  2. Hard Inquiries – A hard inquiry is when your credit is pulled, usually stays on your credit report for about two years, and their effects fade over time.  Credit pulls have a low impact on your credit health, but it’s best to stay under four credit pulls every two years.