Determining Credit Score

Determining Credit Score

How Is My Credit Score Determined?

All 3 main Credit Bureaus, Experion, Transunion, and Equifax, determine Your Credit Score with different methods.  Besides some top talent at these companies no one knows the exact formulas or processes that are used.  With that said, the score between the three should not vary too much.  Read on for the factors that are used to decide your credit score.

How the bills are paid 35%

The most important element is the way you have treated your past bills.  The most recent activity is weighed most heavily.  Paying on time and keeping your bills up to date is crucial to a Good Credit Score.

The amount you owe and your available credit 30%

The total amount you owe on your car, home, and Credit Cards.  Your available amount of credit is also a factor.  Multiple cards all at the maximum credit limit is not a good sign.  Topping out your credit cards can lower your credit score.  Running your credit cards up can affect your credit score.  Keeping a low balance and paying promptly will Increase Your Credit Score.

The length of Credit History 15%

An established credit history is preferred over new credit.   Points will be awarded if you've been with the same creditors for long periods, it expresses stability.

Mix of credit types 10%

A variety of credit is a plus.  Showing you can pay on installments, such as a car loan, and paying on credit cards, which is a revolving loan displays flexibility.  Different forms of credit can be a positive thing, as long as you're paying on time.

New credit applications 10%

This demonstrates that you are interested in finding new forms of credit.  Do not go overboard, but new forms of credit in addition to your current credit indicate growth.

These are the five main elements in deciding your Credit Rating.  There is no need to obsess over every single element but they're important to be conscious of.  Pay on time and keep your balance down and you will do wonders for increasing your credit rating.

About the Author

Are you tired of struggling with your Bad Credit Score? You can Repair Your Credit with the right information. So take control of your financial future and start Rebuilding Your Credit today.

How do I determine My Credit Score from the three credit bureaus?

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How Your Credit Score Is Determined

 

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Determining Credit Score

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