• Payment history-
  • The track record of paying your debts back in time. This may include your payments on retail accounts, credit cards, student loans, finance and mortgages. Also, others public records such as bankruptcies, wage attachments, foreclosures, judgments, suits, and liens. Paying your payments on time, even if its the minimum amount, helps your score. Missed or late payments hurt your score.
• Credit Utilization and Amounts Owed-
  • To see how deep your debt currently is and determines if its manageable to add more.  If your credit cards are maxed out or have outstanding balance that is very high, this will negatively affect your credit score. Generally you do not want to exceed 30% of the credit limit on a credit card. If your payment pattern demonstrates good debt management, this will favorably affect your credit score.
• Length of Credit History-
  • This is how long you have been using or obtained a credit card. It is better to have a long credit history with a track record of good credit management. The longer you have paid your bills on time the better it looks to lenders.
• Type of Credit-
  • This refers to the “mix” of credit you possess. This taken into account what your credit is used for, to make sure you a properly using the types of credit that you have been given.
• New Credit –
  • Inquiries suggests that you have taken on more debt. Opening many credit accounts in a short amount of time can affect your score negatively. This is particularly problematic if the person does not have a long established credit history. Every time someone applies for a new line of credit, will count as an inquiry. However when shopping around for credit, inquiries made within the same 14 day period count as one. But applying for many credit cards in a small period of time will count as multiple inquiries and may lower your credit score. Requesting your credit score or requests from lenders with credit offers does not affect your score.

In the long run having good credit management will save you money by lowering the cost you pay for the money you borrow.