Factors influencing credit report – By: Joy Mali M
Credit Report the name itself explains the importance and we are well aware of its significance in our lives. Not only as basis in calculating credit scores, credit statement also decides about the rate percent of the loan, credit cards and insurance rates as well. It is thoroughly reviewed when you want to open a new account or want a job. For this reason, we should know all aspects related to the credit statement.
Factors that do not affect credit report
We are surviving in the credit targeted market where an individual is determined through its credit scores. No lenders want to fall into the trap by offering credit to the ones who have shown irresponsible behavior in the past.
If one has to live a peaceful life then it is necessary to maintain relevant grades. This is calculated using open credit card utilization, percentage of on-time payments, counts of derogatory marks, average duration of open credit lines, number of accounts and hard credit inquiries. Each of these contributes towards the calculation of grades.
People are surrounded with several myths and it is vital that they should be busted. Factors that do not have any impact over grades include:
1. gender
2. religion
3. Salary
4. age
5. interest rates
6. address
7. employment
8. employer payday
9.pawn shop loans
10.occupation
11. marital status
12. child support payments
13. rental agreements
14. involvement in credit counseling.
New elements about mortgage
Market is witnessing changes when it is about mortgage lending. The changes are invited to finely determine the credit worthiness; scoring companies will also include facts of payday loans, evictions and child support, which were not all considered previously. Moreover, chances are big that lenders will also look at utility, rent and cell phone payments etc, as these all can play big part in the credit scores.
What you have to do?
As discussed above, changes are altering the procedures of score calculation and you can only survive, if you adapt to these changes. Molding your financial habits which are in-sync with the trends can save your credit report and these are discussed below.
1. Paying on time
2. Keeping the credit utilization rate below 30 percent.
3. Do not have multiple hard inquiries at same.
4. Never close old credit card accounts.
5. Think approval odds before proceeding for more credit.
6. Do not lace derogatory marks with credit file.
Besides, you should also instill habit of regular credit check, so that you can be aware about the changes taking place in your credit statement.
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