Credit report is the factor that affects the finances of your life presently and futuristically through a score called the credit score. Most of the lenders consider this score before offering the money to their borrowers to check their creditworthiness. Loans with no credit check are designed to offer the financial support to the people, who have a poor score of credit and find it difficult to gather the funds.
A number of factors are there that affect your credit score and do not let you get the finances that you require. Let us take a look over such factors to avoid them ruining your score –
- Your payment history – one of the factors that affect your credit score to a great extent is your bill payment history. It constitutes 35% of your report. Factors like, regularity towards making payments and punctuality towards them also play a good role in deciding your credit score. Also, charge-offs, bankruptcy etc can drift your score to the lowest. Avoid making negative mistakes in order to maintain a desirable credit score that facilitates the easy approval to the loans.
- Level of debt – this factor ranges up to 30% in the impact it creates over your report. The level of debt that you have from various sources defines the score of credit that you possess. If you do not wish to spoil your credit score, it is better that you only use the 30% of your credit card limits. Exhausting your credit card limits will definitely result in a poor credit score for you in the future.
- Credit age – credit age of a person creates an impact over 15% of his/her report of credit. It considers the oldest age of your accounts on an average as well as your account. Having a good credit age plays a positive role in deciding your credit score in your report. A good credit involves an old account. That is, if you have an old account that shows that you are good and experienced at managing the accounts from a great span of time, which thus might be a factor in improving your credit score.
- Variety of credits on your credit report – there are two types of credits. One is, revolving accounts and the other is instalment loans. Having both of the types on your report can be of great importance as it suggests the borrower has a good experience in the management of the types of credits. This factor has 10% effect on your credit score. Variant kinds of loan approvals like payday loans with no credit check no guarantor or personal loans can also be positive for your score of credit.
- Credit inquiries – This is another factor affecting your credit score. Every time you make a loan application, the lender asks you for a credit inquiry. This inquiry, as you know, is for checking the creditworthiness of the borrower. An excess of such loan inquiries can create a negative impact over your credit score. However, one or two credit inquiries might not make any noticeable difference in the score of the credit.
These are some of the things that decide the future of your credit score. If you have a poor credit, keep these things in mind and take necessary steps to improve your credit score in order to get maximum amount of loan approvals.