Your credit score is a crucial number that affects your financial life, and it's important to understand what influences it. Several factors contribute to your credit score, including your payment history, the amount owed, the length of your credit history, types of credit in use, and new credit inquiries. Payment history makes up 35% of your score—timely payments can boost your score, while missed or late payments can cripple it. Also crucial is your credit utilization ratio, which is the percentage of your total available credit that you're currently using; keeping this below 30% is ideal for maintaining a healthy score.

Another important aspect is the length of credit history, which accounts for 15% of your score. Older accounts generally indicate stability and responsible credit use. Regularly reviewing your credit report can help you identify any issues or errors that might negatively impact your credit score. Lastly, inquiries into your credit, known as credit inquiries, can affect your score as well. Hard inquiries, resulting from applications for new credit, can lower your score, but these effects are usually temporary. By understanding these factors, you can take steps to improve or maintain your credit score.

Your credit score is influenced by a variety of factors, but some surprising elements can significantly impact it without you even realizing it. Payment history is a well-known factor, but did you know that something as simple as forgetting to pay a subscription service can lower your score? Even minor missed payments can be reported, leading to a negative effect on your score. Additionally, credit utilization plays a crucial role; using a high percentage of your available credit can indicate to lenders that you're overextended financially.

Another surprising factor that could be hurting your credit score is your credit inquiry history. While seeking out new credit is a normal part of financial management, too many inquiries in a short period can raise red flags for potential lenders. Moreover, your public records, such as bankruptcies, liens, or foreclosures, can remain on your credit report for several years, drastically lowering your score. Lastly, even having a credit account in good standing with someone else's negative history, such as a joint account holder, could affect your credit standing in unexpected ways.

Credit scores can often feel like an enigma, prompting numerous myths and misconceptions that can influence financial decisions. One prevalent myth is that checking your own credit score can negatively affect it. This is false. When you check your own score, it's considered a soft inquiry and has no impact on your credit rating. Conversely, when a lender checks your score as part of a loan application, it's a hard inquiry, which can slightly lower your score. Understanding these differences is crucial for managing your credit health effectively.

Another common myth is that carrying a balance on your credit card will improve your score. In reality, this is not true. The best practice is to pay off your balance in full each month if possible. This is because credit scoring models favor a low credit utilization ratio, ideally below 30%. Additionally, some believe that closing old credit accounts can help; however, keeping these accounts open can be beneficial as they contribute to your credit history length—another key factor in determining your credit score.