When talk about credit and credit card, the first element that we encounter is undoubtedly the credit rating. Taking into account the changing and living conditions, budgeting has become very difficult and the importance of credit has increased in our lives. Therefore, the importance of credit rating in our lives is increasing day by day. As the importance of credit rating increases in our lives, credit card users or people in need of credit have started to give more importance to running the credit score work. Because the ability to get as many credits as we need or to have as many credit card limits as we need depends on working our credit score.
What can you do for credit score work?
The first thing you should know first is the definition of credit score. A credit score indicates how responsible you are when you make your payments. That is, data that shows whether you have paid your payments on time. Lenders will see if you have credit risk by looking at your credit score. However, there are multiple types of credit score. The most important credit score is the FICO. Credit scores prepared with the FICO scoring system are valid in more places. Therefore, you should review the FICO credit score when performing a credit score work.
There are many factors that should be considered when making a credit score study. These include;
- Payment History;
The most influencing factor on your credit rating is your payment history. 35% of your FICO score is determined by your payment history. Delayed payments on all issues do not affect your credit score. Major payments affecting credit score; credit card payments, mortgage loan payments, auto loan payments, student loan payments and other installment payments. Late payments to doctors, dentists, cell phone providers or ancillary companies do not affect your credit rating.
According to the FICO scoring system, the total credit you receive must be up to 30% of your credit score. It is very important to pay attention to the 30% rate to your credit score work. Because, if you delay a payment, your credit score will drop too much, but if you match 30%, your credit score will drop less.
- Length of credit history;
The age of your credit accounts will determine 15% of your credit score. According to the FICO scoring system, as the age of your loan increases, it will have a positive effect on your credit score. Because the age of your credit is also used in FICO calculations.
- Credit Mix;
According to the FICO scoring system, the total of the credits you receive determines 10% of the FICO score. The credit mix helps you credit score work. The FICO scoring system supports a combination of different types of borrowing options. Furthermore, the credit score of the users who have a uniform payment method according to FICO system is negatively affected.
- New Loan;
FICO puanlama sistemine göre, yeni bir kredi hesabı açmak kredi puanınıza zarar verecektir. Çünkü FICO, puanlama sisteminde kredinin yaşını kullanmaktadır. Ek olarak, kısa sürede birkaç kredi kartı veya kredi başvurusu yapmak, FICO’ya göre kredi puanınızı düşürür.
In addition, there are factors that have no effect on credit scores. For example; your business, or the money you earn each year, will not cause your credit score to decrease or increase. This also applies to savings. Your credit score does not increase because you have a large savings account, and your credit score does not decrease because you do not have a savings account. However, if your monthly rent payments are notified to the offices, your credit score will drop if you delay your payments. If your monthly rent payments are not notified to the office, they will not lower your credit score when you do not pay. In short, the elements mentioned in this section do not affect your ability to your credit score work.