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How Do They Come Up with My Credit Score?
Your credit score is derived from a collection of information based on your spending and pay-off habits as well as, how long you have had the accounts. Your credits score can range from 300-850 points. This is how each factor is weighed in determining your score.
PAYMENT HISTORY accounts for 35% of your score.
OUTSTANDING BALANCE accounts for 30% of your score.
This factor is the ratio between your outstanding balance and your available credit limit. In a perfect situation you should make an effort to keep balances at or below 30% of the available credit. When you extend your balance above the limit, this actually lowers your credit score.
LENGTH OF CREDIT makes up 15% of your score.
This portion of your credit score indicates the length of time a particular credit line was established. If you have a lot of trade lines established over a long period of time this increases your ability to borrow under more favorable terms.
NEW CREDIT & INQUIRIES accounts for 10% of your score.
TYPES OF CREDIT makes up 10% of your score.
A mix of mortgage, auto, and revolving is more positive than a concentrated debt load of credit cards.
For more information on your credit score visit www.myfico.com.
For your free annual credit report go to www.annualcreditreport.com.
PAYMENT HISTORY accounts for 35% of your score.
- Payment history on many types of accounts
- Collection items and public records
- The specifics of late or missed payments: how late they were, how much was owed, how recently they occurred and how many there are.
OUTSTANDING BALANCE accounts for 30% of your score.
This factor is the ratio between your outstanding balance and your available credit limit. In a perfect situation you should make an effort to keep balances at or below 30% of the available credit. When you extend your balance above the limit, this actually lowers your credit score.
LENGTH OF CREDIT makes up 15% of your score.
This portion of your credit score indicates the length of time a particular credit line was established. If you have a lot of trade lines established over a long period of time this increases your ability to borrow under more favorable terms.
NEW CREDIT & INQUIRIES accounts for 10% of your score.
- What kind of credit accounts you have and how many of each
- Total number of accounts you have
TYPES OF CREDIT makes up 10% of your score.
A mix of mortgage, auto, and revolving is more positive than a concentrated debt load of credit cards.
For more information on your credit score visit www.myfico.com.
For your free annual credit report go to www.annualcreditreport.com.
If you need any more information on this topic or buying or selling a home, contact us. We are here to help.
Pamela Edwards, realtor email me (469)877-5631 Ebby Halliday Realtors, Inc
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