HOW MUCH? - credit score

Information used to calculate credit score.


In general, your payment history will account for 35% of the score, the amount of money you owe for 30%, the length of credit history for 15%, and new credit and the types of credit will both account for 10%.

Payment history.

The details of your payment history will include many different account types including: credit cards, accounts with retailers, installation loans like car payments, etc. All past payment problems resulting in bankruptcies, wage attachments, judgments and liens will play a negative role, and the most recent items will count more than older ones.

How much you owe.

The second biggest factor influencing a credit score is the amount of money you owe in relation to the credit available. If a person is using most or all the credit available to them it will have a negative impact on their credit score. Accounts which were maxed out and are now paid down significantly (or paid off completely) will count as positive items, showing you can manage credit responsibly. Installment accounts, such as car or personal loans which have been paid on time and are already paid down to about half of the original amount, are very good indicators for increasing the overall score.

Length of the credit history.

The longer the credit history, the higher the score. This part considers not only how long ago you first established credit, but also the last time you used your credit.

New credit.

This part takes into account the information about both the recent credit inquiries, and all new accounts you opened. It is believed that if you had too many credit inquiries in the near past it might indicate a problem. Similarly, having too many newly opened accounts could be a sign of following a path of overspending.

The types of credit.

The overall mix of credit you have compares you with thousands of others to assess whether it is a healthy credit picture.

Credit Card and Dollar Sign
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Information credit score does not take into account.

When applying for credit, you are always asked to disclose sources of income and financial liabilities. A bank will want to know the length of time you've been with your employer , if it's your main source of income, and the monthly rent or apartment lease payment, if you don’t own a home. This is probably the reason why so many people think that this type of information has influence on their credit score, but it does not.

Facts not considered in credit score calculation.

- any information related to credit counseling or debt management programs.
- marital status.
- current employment status including title, salary, and how long with the same employer.
- credit report inquiries made by you, employers, or banks if made without your knowledge.
- where you live.
- interest rates which are charged on your loans, credit cards, etc.
- public assistance being received.
- age.
- employment history.
- child or family support.

See also: credit reporting agencies, annual credit report, increasing credit score

Related topics: score calculator




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