A high credit score does not always indicate a bad credit rating. However, past mistakes can lead to rejection for credit cards. Diane Elizabeth, a woman of excellent credit, was turned down for a credit card because she made two late payments over five years on one of her credit accounts. After contacting her bank and reapplying she was successful.
Low credit utilization ratio
Credit utilization ratios that are too high can cause credit score problems. There are several ways that you can reduce your credit utilization. First, be sure to limit the amount you spend on credit cards. It is best to not exceed your credit limit. This will lead you to high credit utilization.
Having one type of credit
Your credit mix (or combination of various types of debt) has a significant impact on your credit score. This makes up about 10% of your overall score. If you only have one type of credit, your score will likely be lower than you'd like. There are many things you can do to improve your score.
Late payments
Your credit score could be affected if you make late payments on a regular base. There are still ways to avoid paying late and to improve credit scores. If possible, make sure to pay your past due bills on time. It won't remove any previous late payments but it will raise the payment history.
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. You could appear as a risk by using more than one credit card. This can cause you to be more in debt and subject to hard credit checks. Not only can this hurt your score, but it can also lower your credit limit. It is best to only have one or two credit accounts with zero balances. You will be able to only use them when absolutely necessary.
A long credit history
Your credit score is affected by the length of your credit history. This is because a longer credit history will result in a higher credit score. You also need to consider how many accounts are you currently have. A longer history means you are less likely to miss payments. While closing old accounts will reduce your credit history's length, it will not lower your average age. Credit score is also affected by the age of your oldest account.
Good 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. You should also remember that late payments on older accounts will not count as much as those made recently.
Keeping track of your debt
Keeping track of your debt when your credit is too high is a critical part of the credit repair process. Your credit utilization is the basis of a third your FICO score. If your debt is too high, you may have to reduce the amount you borrow to improve your score.