I recently wrote a piece on what a credit score is and the importance of maintaining a good score on another site of mine: KewhoMin.net. And although I provided a good overview of a credit score, I never gave too much insight into what can impact it. So, without further ado, here are some of the most common factors that can influence your credit score.


On-Time Payments

This is probably the most obvious factor in this list. One of the biggest mistakes made by new credit card holders is assuming that as long as you make the payments eventually, everything will be fine. This is very wrong. Missing even one payment can drastically affect your credit score in a negative way. By ensuring that your bills are paid on time you are demonstrating to creditors that you are reliable.


Number of Accounts

While having and maintaining multiple credit accounts, such as loans, mortgages, credit cards, etc., is a good thing, having too many can actually be detrimental. Opening new lines of credit for the sake of having them is not smart. Think long and hard about what line of credit seems right for you. Make wise choices!


Closing Accounts

If you already have multiple credit accounts and want to close a few in order to avoid fees, this is a good idea, however, it can backfire. Closing several accounts quickly can seem suspicious and hurt your score. The best possible way to avoid this is by closing out your accounts wisely and efficiently. Space out your cancellations and closures, as to not attract any unwanted attention.


Hard Inquiries

Here is where the world of credit can get a bit confusing. In order to open a line of credit, you must first have a credit check, and for certain types of credit accounts, you must go through a “hard credit inquiry.” Hard credit inquiries are usually associated with any kind of loan from a bank and are actually bad for your credit score. It is unfortunately an inevitable part of life, but it is not impossible to bounce back from. Usually a hard inquiry will slightly damage your score, but through months of on-time payments, your score will jump right back up. However, opening multiple lines of credit with hard inquiries can really do some damage.


Credit scores are tricky, but they are important. They are how most of us purchase cars, homes and attend college. And while it may seem like a strange and impossible world to understand, it is not. By taking the time to research your credit history and what lines of credit would be best for you, you can certainly have a fantastic credit score in no time. And you can always hire an accountant or financial consultant to assist. Good luck!