7 Unknown Factors That Influence Your Credit Rating
We all know we’re supposed to pay our bills on time and not max out our available credit—the two major factors that go into calculating our credit scores. Many people don’t realize that other, lesser aspects can also affect our grades.
1. Small Unpaid Debts
Some people are reliable in paying off large debts like their house, credit cards, and auto loans, but they frequently miss paying their lesser debts. They might discount or disregard the obligations because they don’t see them as pressing. But very often they won’t. For example, it was once a common procedure for municipalities to send outstanding traffic citations and even library fees to credit agencies, but this is now rarely done. Even small unpaid bills can lower your credit score. Even under these conditions, you can still get small business loans for bad credit.
2. Utility Bills
Electricity and gas bills are not loans, but not paying them can harm your credit score. Utility companies don’t usually record a customer’s payment history, but if your account becomes overdue, and they pass it over to a collection firm, it will hurt your credit.
3. Too Many Recent Credit Applications
New credit cards with bonuses or other perks can be enticing. Applying for a credit card can net you tens of thousands of points or flight miles from some banks, and rebates on purchases from others. A single application may not have much of an impact, but numerous them in a brief period of time can have a negative impact on your credit. When you are in the market for a house, vehicle, or school loan—all of which may require a high credit score for approval and the best interest rate—you should restrict the number of credit applications you make.
4. Long-Term Loan Shopping
FICO, the most popular credit rating system, doesn’t punish people with numerous credit queries in a brief time to allow them to look for the best car, home, and other loan rates. Different FICO calculations deduct points for each inquiry that is more than 14 or 45 days apart. However, continuing to shop around for a loan over several months will fall outside this safe harbor and likely lower your score.
5. Business Credit Cards
Most banks will hold you directly accountable for card bills and submit your payment history to credit bureaus if you are the main account user. Business credit cards should be used as carefully as personal credit cards to avoid damaging your personal credit score through late payments or outstanding bills. You can count on receiving business advance loans if you contact specialists from the Fundshop company.
6. Mistakes You Didn’t Make
Credit scores can take a hit from having inaccurate information on file. People with common names, for example, frequently find other people’s information in their files. Sometimes, negative information about your score is the product of administrative or typing mistakes.
It’s for this reason that customers are urged to review their credit records at least once a year and challenge any inaccuracies they discover. All three main credit firms offer free credit checks once a year.
At least once a year, check your three main credit records for flaws or absent accounts. One reason to check all three reports is that they can vary from one another depending on which debtors submit to which agency.
7. Missing Accounts
It is possible that some of your debtors do not share information with credit reporting companies. If a credit card with a perfect payment history isn’t included in your report, but one where you’ve missed payments is, your credit score could drop.
FICO recommends either contacting your debtors and having them start submitting your credit information to credit agencies if you discover any such accounts have been omitted from your report, or You should consider switching to a new provider if the one you’re working with currently doesn’t supply you with data promptly.