How Does My Credit Score Affect Me?

Your credit score is a summary of your credit history that represents your credit worthiness and how likely you are to repay a loan or make credit payments on time. Although credit scores are not the only element used to make loan decisions, they can be one of the greatest factors considered.

How Credit Scores are Determined

• Payment History (35% of your score)
  • Payment information on all loans and accounts including on-time and late or missed payments
  • Public records: including bankruptcies, judgments, and collections items.
• Amounts Owed (30% of your score)
  • Account balances as well as amounts owed on specific types of accounts, such as credit cards, installment or mortgage loans.
• Length of Credit History (15% of your score)
  • Both the age of the oldest account and the average age of all accounts
  • Usually a longer history will increase your score, but short histories may still have good scores depending on overall credit
• Types of Credit Used (10% of your score)
  • The mix of accounts, including credit cards, installment loans, finance company accounts, and mortgage loans.
• New Credit (10% of your score)
  • How many new accounts you have
  • The length of time since you opened a new account
  • The number of recent requests for credit, otherwise known as inquiries

To learn more about credit scoring, visit www.myfico.com