What REALLY makes up your Credit Score?
Your credit score is the secret number behind everything in your life. How much you pay for insurance, your car, rent and mortgage payments, utilities, and even whether you get a job or not, are ALL based on your credit score.
This article will assist you with understanding each individual component of your credit score. For extra details on the credit scoring system you can see this article and more at www.PerfectCreditFast.com.
Your PAYMENT HISTORY is the main aspect of your credit score accounting for 35%. This part of your score calculation is based on your total payment history with your creditors. Monthly late payments, collections, and all other adverse information on your credit report have the most significant effect. The more positive accounts you have and the less adverse accounts, the higher your credit scores.
Your total PERCENTAGE of HIGH CREDIT USED is second most important aspect of your credit score accounting for a total of 30%. This individual component of your score is based on the amount you owe on your individual credit accounts relative to your high credit limits on those credit accounts. You will be given a higher credit score if you owe 30% or less of the high credit limit on your individual accounts.
The time you have had accounts reporting in the credit bureau or the LENGTH of CREDIT HISTORY accounts for 15% of your total credit score. The longer you have had open credit for the higher your credit score will be. Throughout your life you will have more open credit accounts and as your credit history grows over time, your scores will naturally increase due to this score aspect.
How fast you ACCUMULATE NEW DEBT makes up 10% of your credit score. This aspect of your credit score is composed of how many new accounts you are applying for. It considers how many requests you have for new credit accounts within 12 months. If you have a lot of credit inquiries in a short period of time your scores will be lowered.
A total of 10% of your credit score is made up of the "mix" of credit accounts you have on your credit report. This part of your total score is made up of the kind of accounts you have and how many of each account type. The credit bureaus will score you higher if you have 1 open mortgage, 3 credit cards, an auto loan, and a minimal amount of other open accounts. Any "unhealthy" account mixes lower your scores such as having too many open mortgages or credit cards.
To obtain your highest credit score make sure you pay your accounts on time, do not keep high balances in relation to your limits on your open accounts, keep a very healthy mix of credit accounts open, and do not apply for too many new credit items in a short period of time.
If you follow the steps in this article you will be on your way to an 850 perfect credit score. If you have credit issues along the way, do not worry we are experts in fixing those problems and enforcing your consumer credit rights www.PerfectCreditFast.com.
This article will assist you with understanding each individual component of your credit score. For extra details on the credit scoring system you can see this article and more at www.PerfectCreditFast.com.
Your PAYMENT HISTORY is the main aspect of your credit score accounting for 35%. This part of your score calculation is based on your total payment history with your creditors. Monthly late payments, collections, and all other adverse information on your credit report have the most significant effect. The more positive accounts you have and the less adverse accounts, the higher your credit scores.
Your total PERCENTAGE of HIGH CREDIT USED is second most important aspect of your credit score accounting for a total of 30%. This individual component of your score is based on the amount you owe on your individual credit accounts relative to your high credit limits on those credit accounts. You will be given a higher credit score if you owe 30% or less of the high credit limit on your individual accounts.
The time you have had accounts reporting in the credit bureau or the LENGTH of CREDIT HISTORY accounts for 15% of your total credit score. The longer you have had open credit for the higher your credit score will be. Throughout your life you will have more open credit accounts and as your credit history grows over time, your scores will naturally increase due to this score aspect.
How fast you ACCUMULATE NEW DEBT makes up 10% of your credit score. This aspect of your credit score is composed of how many new accounts you are applying for. It considers how many requests you have for new credit accounts within 12 months. If you have a lot of credit inquiries in a short period of time your scores will be lowered.
A total of 10% of your credit score is made up of the "mix" of credit accounts you have on your credit report. This part of your total score is made up of the kind of accounts you have and how many of each account type. The credit bureaus will score you higher if you have 1 open mortgage, 3 credit cards, an auto loan, and a minimal amount of other open accounts. Any "unhealthy" account mixes lower your scores such as having too many open mortgages or credit cards.
To obtain your highest credit score make sure you pay your accounts on time, do not keep high balances in relation to your limits on your open accounts, keep a very healthy mix of credit accounts open, and do not apply for too many new credit items in a short period of time.
If you follow the steps in this article you will be on your way to an 850 perfect credit score. If you have credit issues along the way, do not worry we are experts in fixing those problems and enforcing your consumer credit rights www.PerfectCreditFast.com.
About the Author:
The author: Ty Crandall is an well known authoritative expert on credit scoring and credit law. He has over 12 years experience in the financial and credit fields and is currently the CEO of Elite Credit Incorporated. To download more of Ty?s invaluable credit tips and for more information on credit scoring and credit repair for loan approval, please visit www.PerfectCreditFast.com.
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