According to the following table, which of these factors affects your credit score the most?
| Factor | Percent affects score | Max # of points awarded |
| ---------------------- | ----------------------- | ------------------------- |
| Payment history | 35% | 297.5 |
| Amount owed | 30% | 255 |
| Length of credit history | 15% | 127.5 |
| New credit | 10% | 85 |
| Types of credit | 10% | 85 |
A. Length of credit history
B. New credit
C. Payment history
D. Amount owed
Answer (2)
The factor that affects your credit score the most is Payment history, due to its 35% impact. This makes timely payment of debts crucial for maintaining a good credit score. Therefore, prioritizing payment history can help improve your financial standing.
;
Identify the percentages associated with each factor affecting the credit score.
Determine the factor with the highest percentage.
Conclude that the factor with the highest percentage affects the credit score the most.
The factor that affects the credit score the most is P a y m e n t hi s t ory .
Explanation
Analyze the Problem We are given a table that shows the factors affecting a credit score and the percentage each factor contributes. The question asks us to identify the factor that affects the credit score the most. To do this, we simply need to find the factor with the highest percentage.
Identify the Percentages Looking at the table, we can see the percentages for each factor:
Payment history: 35%
Amount owed: 30%
Length of credit history: 15%
New credit: 10%
Types of credit: 10%
Determine the Factor with the Highest Percentage The highest percentage is 35%, which corresponds to 'Payment history'. Therefore, payment history affects the credit score the most.
State the Final Answer The factor that affects the credit score the most is payment history.
Examples
Understanding how credit scores are calculated is essential in today's financial world. For example, if you want to buy a house or a car, your credit score will play a significant role in determining the interest rate you will receive on your loan. Knowing that payment history affects your credit score the most, you can prioritize making timely payments to maintain a good credit score. This will help you secure better loan terms and save money in the long run. Additionally, understanding the factors that influence your credit score can help you make informed decisions about managing your finances and building a strong credit profile.
