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Payment history


Understanding your credit rating is one of the most essential things when it comes to your financial horizons, but unfortunately, there is so much misleading information and confusion out there that getting the right image about it can be quite challenging. To shed some light on the matter, we’ll share some valuable tips about it in the paragraphs below:

Eighteen people have been charged with stealing at least $200 million in a credit card fraud ring, possibly one of the largest in US history

1. There are 5 factors that influence it

While the exact percentages of how each of these affects your credit rating are rather much a mystery, it’s a fact the following factors all play a role in it:

– Payment history

– Average credit age

– The frequency of inquiries

– Credit utilization

– Account mix

2. There are many credit ratings

Quite surprisingly, your credit rating depends on where you check. Most notably, FICO is usually referred to as the golden standard and the so-called ‘true rating’ you’re probably looking for.

3. Negative hits against your score don’t last forever

You’ve probably had your fair share of dents in your credit score, but these won’t affect it for your entire life. As a matter of fact, after 7 years have passed, they will no longer play a role in determining it or show up in your credit reports.

4. Checking your own credit score won’t lower it

You might have heard that your credit score takes a hit when a lender checks it, for instance. This is true; however, if you just want to know where you stand, checking your own won’t have any negative consequences on it.

5. Don’t max out your credit card

The best practice is to avoid pushing the limits. Even if you get one of the best credit cards for fair credit, don’t go beyond 30%, or it may have a negative effect on your credit score.

6. Having a low credit score may cost you thousands of dollars in the long run

Even if you manage to get approved for a loan, for example, the interest rates may be higher due to having a lower credit score. There are many examples like this, and over the course of time, this can amount to thousands upon thousands of dollars.

7. Joint accounts will affect your credit score

Although there is no such thing as joint scores, what your partner does on your joint loan or credit account will affect your credit score as well.

8. Being responsible with your finances is the best way to keep your credit score in good standing

In other words, making your payments on time, not spending more than you can afford, and not being a financial risk when dealing with companies will get you far.


Although the topic of credit rating goes far beyond what the scope of this article can cover, these are the bare essentials of what you need to know about it and how to handle your finances responsibly. In the end, it’s important to understand that managing your finances the smart way will not only affect how companies and potential business partners view you, but also define the quality of your life.