Lesser-Known Factors That Affects Credit Score

Maintaining a good credit score is crucial for every individual in Canada; it is for financial stability and accessing favourable credit opportunities. People know the factors that affect their credit scores, like payment history or debt utilization. But what we don’t usually talk about is there are lesser-known factors that affect your credit score as significant as the mentioned factors.

Understanding the Impact of Lesser-Known Factors

Lesser-known factors impact your credit scores just like how common factors affect them. Credit scoring models take into account a range of factors to determine creditworthiness.

Including these lesser-discussed factors reflects the evolving understanding of creditworthiness, providing a more comprehensive assessment of an individual’s financial habits and responsible credit management.

The Importance of Considering These Factors:

While borrowers focus on the primary factors, they overlook the lesser-known factors that may significantly impact their creditworthiness. It can strengthen their credit profiles and improve their credit scores or it can also affect the credit repair process.

Lenders and financial institutions consider a holistic view of creditworthiness when making lending decisions. Optimizing these lesser-known factors can make a difference in the interest rates offered, credit limit assigned, or even the approval of credit applications.

Lesser-Known Factors that Impact Your Credit Score:

  • Average Age of Accounts

The age of your account takes a significant impact on your credit score. The account’s age is the length of time that your credit account has been open. Generally, a longer average age of accounts demonstrates responsible credit management and stability, which can positively impact your credit score.

Therefore, it is advisable to maintain an old account to maintain a good credit score. Avoid frequently opening and closing credit accounts, which can lower your average account age.

  • Credit Utilization on Individual Credit Cards

Credit utilization refers to the percentage of available credit you use on individual credit cards. It is a crucial factor in credit scoring models. Maintaining a low credit utilization ratio—typically below 30%—is recommended to demonstrate responsible credit management. High credit utilization can suggest a higher risk of defaulting on payments, negatively impacting your credit score. To optimize this factor, keep your credit card balances low and make timely payments.

  • Mix of Credit Types

Having a diverse mix of credit types can also influence your credit score. Credit scoring models evaluate your ability to handle various credit products responsibly. A healthy mix of credit types, such as credit cards, loans, mortgages, or lines of credit, demonstrates your ability to manage different financial obligations.

However, it’s important to note that you should only apply for credit that you genuinely need and can manage effectively. Aim for a balanced credit mix while ensuring that you can handle the associated payments responsibly.

  • On-time Payment and Account Management

It is common knowledge, but giving emphasis to it is crucial. On-time payments consistently contribute the most to giving plus points on your credit score. Late payments, collections, or defaults can significantly harm your creditworthiness.

Also, responsibly managing your accounts, including avoiding overdrawn bank accounts and maintaining a stable employment history, can positively impact your credit score.

  • Credit Inquiries

Your creditor will conduct a credit inquiry when you apply for a new account. Conducting a credit inquiry once will not harm your credit score significantly. However, multiple credit inquiries within a short period will raise concerns among lenders.

Therefore, it is advisable to limit credit inquiries to only those necessary and avoid applying for multiple new credit lines simultaneously.

Addressing the Lesser-Known Factors Affecting Credit Scores

By addressing the lesser-known factors, an individual can gain a competitive edge in the following ways:

1. Favourable Interest Rates and Terms. A higher credit score can get you a more favourable interest rate. It also makes you a more attractive borrower, potentially lower interest rates on loans, mortgages, and credit cards.

2. Increased Access to Credit. Financial institutions often rely on credit scores to determine credit limits and approve credit applications. By proactively managing the lesser-known factors, individuals can demonstrate creditworthiness and increase their chances of securing larger credit lines.

3. Improved financial stability: A comprehensive credit management approach that addresses primary and lesser-known factors promotes financial stability. By optimizing these factors, individuals can reduce the risk of facing financial challenges or being caught off guard by credit-related issues.

How seeking professional guidance can help improve credit scores and overall financial well-being:

Credit counseling services offer personalized assistance based on your specific financial circumstances. They can help you develop a customized plan to address your credit issues and provide strategies to improve your credit score.

Credit counsellors can review your credit report, identify areas for improvement, and help you understand the impact of your financial choices on your creditworthiness. They can provide insights on debt management techniques, negotiation strategies with creditors, and repayment plans tailored to your needs and goals.

Financial education programs can equip you with the knowledge and skills to make informed financial decisions. They can help you understand the factors affecting credit scores and guide establishing and maintaining healthy credit habits.

By participating in credit counseling or financial education programs, you can gain the confidence and tools needed to take control of your financial situation, make responsible credit choices, and work towards a better credit score.


Credit scores are impacted by a range of factors, including both traditional and lesser-known ones. Understanding these factors and taking steps to manage them effectively can lead to better credit scores and financial health.

By adopting responsible credit management habits and staying informed about the ever-evolving credit landscape, you can build a strong credit profile that will serve you well in achieving your financial goals.

Need credit repair Canada? Connect with us at 647-373-9651.

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