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What Factors Influence Your Credit Score?

Are you working to improve your credit score? If you are, it can be helpful to know exactly which factors go into your score’s calculation. Credit scores are calculated using a variety of financial metrics, with the following factors playing a major role in your FICO credit score calculation.

  • Payment history. The first thing any lender wants to know when you request credit is how often you pay your bills on-time. If you always make your minimum credit card payments on schedule, you’ll have a higher credit score. On the other hand, if you frequently miss payments, you might need to search for a bad credit car loan in Philadelphia, PA if you need to borrow money to buy a vehicle. Your payment history accounts for about 35% of your FICO credit score, making it the most important factor in determining your score.
  • Credit usage. Do you rely on your credit cards to pay your bills every month? If you do, you’ll have a lower credit score. Borrowers who use large percentages of their credit each month present a higher risk to credit card companies because they assume that you don’t have enough money in savings to cover an emergency. Your credit usage accounts for about 30% of your FICO credit score calculation.
  • Length of credit history. The longer you have credit accounts open, the less of a risk you present to lenders. Leaving credit card accounts open (even if you aren’t using them) will naturally increase your score over time. The length of your credit history accounts for about 15% of your total score calculation.

Sometimes, you can’t wait months or even years for your credit score to increase before purchasing the car you need. If you’re still working to build your credit, consider a bad credit auto loan in Bucks County, PA from PA Auto Credit. We make it easy for more Philadelphians to get approved for the loan they need. Give us a call today at 800-371-1769 to learn more or get started!