Which factor affects your credit score?

Payment history is a critical factor affecting your credit score because it reflects your reliability in repaying debts on time. Lenders and credit agencies view a strong payment history as an indicator of financial responsibility and low risk. This aspect of your credit profile includes all of your accounts, such as credit cards, loans, and mortgages, and any late payments, defaults, or bankruptcies have a significant negative impact on your score. Consistently making payments on time contributes positively to your credit score, enhancing your chances of obtaining loans or credit at favorable interest rates.

While other factors such as the number of credit cards opened can influence your credit score, it is the payment history that holds the most weight in credit scoring models. In contrast, current market trends and employment status do not directly influence individual credit scores; rather, they may impact broader financial conditions or lending availability.