Credit Score Risk Factors

New Credit

• Having a lot of new credit accounts is a credit score risk factor, because it indicates you might be in financial trouble.
  
  

Inquiries

• Every time you apply for credit, a notation called an inquiry is placed on your credit file. Having a lot of inquiries is considered a risk factor, because seeking a lot of new credit could also mean you are in financial trouble.
  
  

High Balances

• Having high balances on existing credit, even if the bills are paid on time, is an additional red flag lenders look for when evaluating applications. High credit balances could mean you are placing too much financial dependence on credit and have inadequate cash resources to keep your account balances lower.
  
  

Minimum Payments

• Some lenders look closely at a credit file to see if you are making only minimum payments on your credit card accounts. When only the minimum payments are made, this is another sign of possible bankruptcy ahead.
  
  

Address Changes

• Lenders like to see a stable address history, because this usually means the borrower has a solid lifestyle and is at lower risk of bankruptcy. A lot of address changes on a credit file is usually considered a credit score risk factor.