Your credit score is a three-digit number that lenders use to assess your creditworthiness. It's important to understand how your credit score is calculated, so you can take control of your credit and improve it if needed. There are five main factors that go into calculating your credit score. Let's take a look at each one.

‍

1. Payment History (35% of credit score)

Payment history is the most important factor in determining your credit score. It includes whether you've made payments on time, and if you have any late or missed payments. Lenders want to see that you're responsible with your credit and can make payments on time. So it's important to always pay your bills on time, and to catch up on any missed payments as soon as possible.

2.Credit Utilization (30% of credit score)

Credit utilization refers to the amount of credit you're using compared to the total amount of credit available to you. For example, if you have a credit card with a limit of $1,000 and you have a balance of $500, your credit utilization is 50%. It's generally recommended to keep your credit utilization below 30% to show that you're using your credit responsibly. Higher credit utilization can have a negative impact on your credit score.

3.Length of Credit History (15% of credit score)

Length of credit history looks at how long you've had credit accounts open and being used. The longer your credit history, the more lenders can see that you have a track record of using credit responsibly. So it's generally better to have a longer credit history, as long as you're using credit responsibly.

4.Credit Mix (10% of credit score)

Credit mix looks at the variety of credit accounts you have, such as credit cards, mortgages, and car loans. Having a mix of different types of credit can show lenders that you can handle different types of credit responsibly. However, credit mix is a relatively small factor in determining your credit score, so it's not as important as the other factors.

5.New Credit (10% of credit score) 

New credit looks at how many new credit accounts you've opened recently. Opening too many new credit accounts in a short period of time can be seen as a red flag to lenders, as it can indicate that you're taking on more credit than you can handle. So it's generally a good idea to be cautious about opening new credit accounts, and to only apply for credit when you really need it.

If you have negative items on your credit report that are bringing down your score, a credit repair company like Credit Bounce may be able to help. Credit Bounce can work with you to dispute inaccuracies and try to have negative items removed from your credit report. This can help improve your credit score and put you in a better position to get the credit you need in the future.

Understanding these factors and how they're weighted in your credit score can help you take control of your credit and improve your score. By paying your bills on time, using credit responsibly, and being cautious about opening new credit accounts, you can improve your credit score and be in a better position to get the credit you need in the future.