What is Good Credit?
Good credit can be defined as an individual’s ability to repay debt. It doesn’t matter if it was borrowed in cash or by using a line of credit, once money has been paid back, good credit will increase. You can also improve your score by making timely payments and avoiding high-interest loans that might end up costing more than they’re worth in the long run. With these tricks in mind, you’ll be well on your way to having good credit!
Factors that can either positively or negatively impact your credit score include:
- Your payment history: Were your payments made on time?
- Your credit usage: How many accounts still have balances, and what do you owe?
- Your credit history: How long have your accounts been open?
- Types of accounts: Can you manage installment and revolving accounts responsibly?
- Your most recent credit activity: Have you opened or applied for new accounts?
How Can Bad Credit Impact You?
If you have a low credit score, you can be impacted in several ways:
- You’ll have higher interest rates
- You may have trouble being accepted for a mortgage loan or any type of loan for that matter
- You risk being denied credit