Your credit score is a crucial aspect of your financial life, but did you know that there are components of your credit score that you may not be aware of? In this blog post, we're going to reveal some mind-blowing components of your credit score that you never knew existed.

First, let's start with the most common components of a credit score: payment history, credit utilization, credit history, new credit, and types of credit.

Your payment history contributes to your credit score, making up 35%. Remember that late/missed payments could significantly lower this important number, so try to be proactive about ensuring all bills are paid off on time! Credit utilization also heavily influences your rating, with experts recommending hovering around 30%. This subtly demonstrates responsibility when utilizing available lines of credit; pay attention to how you use them and aim for moderation!

Credit history, which accounts for 15% of your score, is when you've had credit. The longer your credit history, the better. It's also important to have a mix of different types of credit, such as a mortgage, a car loan, and a credit card.

Your credit score is significantly impacted by the history of your accounts, how many new ones you've opened, and what type. Having a long past with no more than one account opening at a time will boost it; having diverse types such as car loans, mortgages or cards can further help you build better credit.

Now, let's talk about some lesser-known components of a credit score:

1. Credit inquiries: Each time you apply for credit, the lender will perform a credit inquiry. This can lower your credit score, so you must be mindful of the number of credit inquiries you have.
2. Credit mix: Lenders like to see a combination of different types of credit, such as a mortgage, a car loan, and a credit card. Having a mix of different types of credit can help to improve your score.
3. Credit age: The age of your credit accounts can also impact your score. The longer you've had credit, the better.
4. Credit utilization on individual accounts: The overall credit utilization is important, as well as the utilization of individual credit accounts. For example, if one of your credit cards has high utilization and others have low utilization, it can negatively affect your score.
5. Credit history with different lenders: Having a good credit history with different lenders can also help to improve your score. This shows that you can handle different types of credit and have a track record of responsible borrowing.
6. Credit diversity: Having a diverse credit portfolio can also help to improve your score. This includes having different credit accounts, such as a mortgage, a car loan, and a credit card.
7. Income-to-debt ratio: Some credit scoring models take into account your income-to-debt ratio. This means that the higher your income, the better your chances of getting approved for credit.
8. Residency history: Lenders also look at how long you've lived at your current address and if you have a stable residency history. This is because lenders like to see that you have a stable living situation and are less likely to default on a loan.
9. Employment history: Similarly, lenders also look at your employment history. They want to see that you have a stable job and income and that you have been with the same employer for a while. This shows that you have a regular income and are less likely to default on a loan.
10. Demographic information: Some credit scoring models consider demographic information such as age, gender, and race. While this may seem unfair, lenders use this information to identify patterns in borrowing behavior.

It's important to note that not all credit scoring models take into account all of these components, and the weight of each component may vary. However, understanding these lesser-known components of a credit score can give you a better understanding of how your credit score is calculated and what you can do to improve it.

In conclusion, many factors go into determining your credit score, some of which may surprise you. By understanding your credit score's components, you can take the necessary steps to improve it and achieve a higher credit score. This includes being mindful of your credit inquiries, having a diverse credit mix, maintaining a good credit history, paying down debt, and keeping your credit card balances low. By taking the time to understand your credit score, you can unlock the secrets to a better financial future.