5 factors that can hurt your credit score in 2023

5 factors that can hurt your credit score in 2023

Reading Time: 3 Min

Reading Time: 3 Min

Last Updated on August 27, 2022 by Uchenna Orji

5 factors that can hurt your credit score in 2023

5 factors that can hurt your credit score in 2023 can be a daunting issue when been ignorant of them and keep on engaging in them blindly.

Despite having the evolution of digital lending day by day, which could be easier to lend money (thinking your anonymous to the lender). There is still ways you can be red flag against lending platform, if not informed.

At some point in everyone’s life, there can be a day when you might fall short of finances, and what comes to your mind is getting a loan from a friend, company or organization to fix the lingering issue surrounding you.

Or in that scenario, you are planning to invest in a business or start up one, fulfilling a project or any other major financial aided activities, decided to apply for some credit turn up from a financial institution but your application was turned down instead of turning up, and along the line you were given numerous reasons why the offer was not granted, leaving you with self-pity due to your ignorance.

In this article, I will be discussing the 5 biggest factors that affect credit or can hurt your credit score. So as to get you informed and help you in balancing your credit score, enabling turn up grants whenever you seek 

Factors affecting credit score

5 factors that can hurt your credit score in 2023
Credit score FICO rating

It is high time to get informed on the on the biggest factor that affects your credit, though they’re numerous of them in this article, we will only be considering at least five of them which are proven to be a major factor.

  • Repayment Duration: It is of great sense when you are lent some cash, you should try to pay within the agreed time intervals or when you use your credit card, but unfortunately many go short of this theory and this is one of the biggest factor that affecting your credit.

Why is this factor considered?

If a financial institution lends you some cash and you pay within or before the agreed time intervals, this will give a sense of responsibility and trust to your lenders and some assurance that when you are given again or more.

In that sense it is 100% that you will keep to your side of the agreement but if you don’t pay within the time intervals agreed, your lenders may consider you as a fraudster or any other financial crimes names, sometimes exposing you to other credit score company and other financial aiders to take note about you.

Though expert has advised paying credit scoring companies before 30 days of the deadline.

There is one secret theory guiding this, which is ” the earlier one payback, the higher positively impacted on the credited score and the latest one payback, the more damages on credit score”.

  • Debt level: Among the 5 biggest factors that affects credit is debt level this contributes to 30% of your credit score also known as credit utilization. The level of pile-up debt incurred is scaring to credit score companies as it shows how well you could manage finances.

Why this is considered?

Continuous use of credit cards without paying, therefore piling up your debt can be worrisome, as it may depict that is bankrupt and no longer fit to receive credit or loan, then the credit scoring companies will have to consider blocking your credit card or any other viable option convenient.

  • Level of credit queries: Well you might be surprised for this to be here but the truth is, it one of the things that can hurt your credit score, if you frequently ask for some credit, credit scoring companies can tag you as a high-risk borrower and this will greatly affect your credit score. It will interest you to know that well you place an application for a credit check, and info is shown on your credit report to show that you place a credit base transaction.

Why this is considered?

Borrowing upon borrowing is risky, most especially not paying a dime yet. And this is considered by credit score companies to show and know if someone is a high-risk borrower or careless credit manager.

  • History of last credit: Well a friend not seen for a long time could be forgotten or adapt to changes. With this little illustration above, when your last credit made has been quite long, there is a possibility that your credit card will be closed, therefore making your credit card to be inactive.

Why this is considered?

A good factor to note is to check whether one has been financially balancing or is dead as the credit card will be deactivated.

  • Closing a credit account: Despite paying in full your debt and closing your credit account can affect your credit score.

Why this is considered?

 In general, finance lenders and creditors like to see what and how you’ve been able to properly handle different kinds of credit accounts over some time.

Now, closing a credit account you have had for a while would also shorten the length of your credit history, which can greatly impact your credit scores. 

Factors that do not affect credit score

Having seen all that, let’s look at some of the assuming factors that people thought or possibly you also think as you were reading. Some of these are:

  1. Income
  2. Age
  3. Bank balance
  4. Employment status
  5. Marital status
  6. A debit card or prepaid card usage
  7. Rent or Utility Payment
  8. Checking your score

Despite the aforementioned can influence the approval of a credit application, in truth, it does not affect your credit score, most importantly it is required for the credit account opening to track individuals in case of misconduct.

Advice on what to do so as to be on average or build your credit.

Consistently credit score companies always review individual credit reports to analyse how you’re doing on all the major factors mentioned.

So, therefore, you have to focus your credit-building advantage by adapting to a one-time payment of debt ratios and making sure to keep balances as low as you can to credit limits, because these two factors (i.e On-time payment and credit utilization) have the biggest negative effect on your credit score.

You can get more information by checking out your credit report annually.

I think I’m able to do justice to the 5 factors that affect your credit score and the ability to get you informed. So whenever get into using credit cards or borrowing from some financial institutions, you should always take note of these and manage your credit score prudently.

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