Factors that affect credit rating

Written by shanika chapman
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When you apply for credit, a lender will refer to your credit rating, or score, to determine whether to approve you, what to charge in interest and how much to approve for. To get the best rates and save the most money, you want the highest rating possible. It's important to understand the factors affecting your credit rating so that you can keep yours in excellent standing.


Whether you pay your bills on time is one of the most telling features of your credit history. Late payments will lower your credit rating.

Amount of Debt

The amount of debt you owe is a factor in determining your credit score. When using your credit cards, keep your balance below 30 per cent of your limit.

Amount of Credit

Having too much credit may impact your credit rating. For one, too many credit inquiries may lower your credit score. For two, having too much credit may make lenders uneasy since there is always the chance you may max out your credit.

Major Financial Events

Bankruptcies, foreclosures and any unpaid child support will affect your credit score.


Your employment status will also affect your credit rating. Obviously, being employed is better than being unemployed because you are able to pay your bills.

Free Credit Report

You are entitled to one free credit report each year from Experian, TransUnion and Equifax. Check your credit report regularly for accuracy.

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