What factors can affect a borrower's credit score?

Payment history, amounts owed, and types of credit used are key contributors to a borrower's credit score.

Payment history is the most significant factor, accounting for a substantial portion of the credit score calculation. It reflects whether the borrower has paid their bills on time and includes any late payments, defaults, or bankruptcies, which can significantly lower a score if they occur.

The amounts owed, or credit utilization, refers to the total amount of credit a borrower is currently using compared to their total available credit. A lower credit utilization ratio is generally viewed more favorably, as it suggests that the borrower is using credit responsibly and is less likely to default.

The types of credit used show the variety in a borrower’s credit profile, encompassing revolving credit (like credit cards) and installment loans (like mortgages or car loans). A diverse mix of credit types can enhance a credit score, as it indicates the borrower's ability to manage different forms of debt.

The other options include factors such as income level and employment status, which, while important for lenders to evaluate a borrower's overall financial health and debt-to-income ratio, do not directly influence the calculation of credit scores. Similarly, factors related to an individual's profession or savings account balance are not considered in credit score