- Your Residence – Creditors also want to know where you live. Owning your own home, whether or not it is mortgaged, is a definite plus. They’ll also take into consideration how long you have lived at your present and past residences. Moving often does nothing to help. But if you have generally lived at a particular residence, whether owned or rented, for at least two to five years between moves, you are considered to be a more responsible and stable individual.
- Your Marital Status – Being married has a positive impact. Creditors consider a single person a higher risk, so being married is better when it comes to your credit record. But don’t get married just to improve your credit. If you are a married person with 1 to 3 dependents, creditors consider you to be a lower risk and so you’ll have a better chance of obtaining credit when you need it. Why? Possibly because you are seen as a more responsible person if you are married with children.
- Your Open Credit Accounts – The number of open credit accounts you have impacts your credit score. Ideally, you should have 4-6 credit cards and one installment loan. As a general guideline, opt for 2-3 major credit cards and 2-3 store credit cards. An installment loan can be an auto loan, student loan or a small installment loan arranged through a credit union (emphasis on small).
The two things you should be able to see here are stability and responsibility. Creditors extend credit to those they see as having a stable job, living in a stable home, having stable relationships and showing a stable credit history. In order to obtain stability, you need to learn responsibility. This is not to say there aren’t other factors that affect your credit score, but this article is intended to give you a general idea of some of the factors that do impact your score. Again, you can attain your max credit score by learning what affects it. Having bad credit is not a sin, but that should not deter you from taking steps to improve it.