A high credit score isn't necessarily a bad thing. An individual can make mistakes and be refused a credit card. In the case of Diane Elizabeth, a woman who has an excellent credit score, two late payments on one of her credit cards over the last five years were the reason for her rejection. She was successful after contacting the bank to reapply.
Low credit utilization ratio
High credit utilization can lead to negative credit scores. There are many options to lower your credit utilization. First, you need to make sure that you do not overextend your credit cards. You should avoid using them to their maximum limits, as this will result in a high credit utilization ratio.
You can have one type of credit
Your credit score is affected by your credit mix, or the combination of different types of credit. This account for 10% of your overall credit score. Your score is likely to be lower if only one type or credit is available. There are many things you can do to improve your score.
Late payments
Your credit score can be adversely affected if you are making late payments regularly. There are still ways to avoid paying late and to improve credit scores. Pay your past due debts promptly and catch up on them if possible. This won't reverse any past late payments but it will make your payment history more detailed.
Multiple credit cards
While having several credit cards can help you raise your credit score significantly, it is important to be aware of the potential risks. Multiple credit cards can make your credit history look bad and could lead to increased debt and credit checks. This will not only impact your credit score, but could also limit your credit limit. You should only keep one or two credit cards that have zero balances. So you only have to use them when you need them.
Long credit history
The length of your credit history is an important factor in your credit score. This is because a longer credit history will result in a higher credit score. The number of accounts you have is another factor. A longer credit history is better for you because you are less likely miss payments. Closing old accounts can decrease the length of your credit history, but it will also lower your average age. The age of your last account will also affect your credit score.
A solid payment history
Credit score is affected by your payment history. Your score will increase if your payments are on time. Your score can be hurt if you make late payments. Remember that late payments on older accounts may affect your score more than the ones that are current.
Tracking your debt
The credit repair process is complicated if your credit score is too low. It is important to keep track your debt. Your credit use is an important part of your FICO score. It accounts for about a third. Your score may be affected if you have too much debt.