You have many options to improve your credit score. First of all, the length of your credit history is a very important factor. Your credit history will determine how likely lenders are that you will repay them on time. You can improve your score by repaying your loan over a longer period.
Payment history
Your payment history is an important factor in determining credit score. Failure to make a payment on time can cause a big dip in your credit score. Late payments are also recorded on your credit file for seven-years. It is essential to make timely payments, even if you are only a few day late.
Age of accounts
Credit scoring models consider the average age and credit history of your credit accounts. They then use this information in determining your overall credit score. However, different age-related factors may affect your score depending upon the scoring model you use.
Credit limit age
Credit score can be affected according to the average age and balances of your accounts. Creditors like to see that your accounts have been in operation for some time. Your accounts will be more responsible if they are older. However, accounts that are younger tend to be less mature and can affect your credit score.
Payments made on time
Timely payments are an important aspect of credit score. They are reported to all three major consumer credit agencies on a monthly basis. Late payments can lead to a 180 point drop in your credit score. It is important that you make your payments on time.
Recent loan activity
Your credit score is influenced by your recent loan activity. A high number of new accounts and inquiries can hurt your score. The good news is that you can do something about it. Review your credit reports and make the necessary changes. You might open a new card, or get a small personal loan if your credit report isn't in order. Also, ensure that you pay your bills on time. If you are a good payer, your score will increase.
Soft inquiries
Soft inquiries affect your credit score in a few ways. A soft inquiry is performed by lenders when you apply for a credit card. Soft inquiries may also be conducted by insurance companies if you apply to homeowners or auto insurance policies. These inquiries are not visible to the public, but they will be added to your report.