How do corporations compute your credit score?
- by your debt to credit ratio also include your history from any loans and charge cards you have had are you a good prospect to loan to or are you a risk you can check your credit report for free once a year if you go to www.annualcreditreport.com all the others are trying to sign you up for a service00
- the first poster is correct
- Here is a link to download a pdf file from the FTC explaining how FICO scores are calculated. There is not enough room here to answer all of this.
All about FICO scoring.00
- Payment history is 35% of your credit score. How timely you pay your bills affects your credit score more than any other factor. Serious payment issues, like charge-off, collection, bankruptcy, repossession, and foreclosure can devastate your credit score, making it almost impossible to get approved for anything that requires good credit.
Level of debt is 30% of your credit score. Having high balances or too much debt can affect your credit score. The good thing is that your credit score can improve in this area if you pay down your balances.
Age of credit is 15% of your credit score and considers both the age of your oldest account and the average age of all your accounts. Having an "older" credit age is better for your credit score because it shows that you have a lot of experience handling credit. Opening new accounts can lower your average credit age. For that reason, it's typically not a good idea to open several new accounts at once.
There are two basic types of credit accounts: revolving accounts and installment loans. Having both types of accounts on your credit report is better for your credit score because it indicates you have experience managing various types of credit. Types of credit is only 10% of your credit score, so not having a certain type of credit, e.g. an installment loan, won't devastate your credit score.
Each time you make an application that requires a credit check, an inquiry is placed on your credit report showing that you've made a credit-based application. Inquiries is 10% of your credit score. One or two inquiries won't hurt terribly, but several inquiries, especially within a short period of time can cost tens of points. Keep your applications to a minimum to preserve your credit score.
The good news here is that only inquiries made within the last 12 months are factored into your credit score. Inquiries fall off your credit report after 24 months.
Note that checking your own credit report results in a "soft" inquiry and does not affect your credit score.10
- Here is a great infographic to show you what makes up your credit score. http://fixcreditexpress.com/what-makes-up-your-credit-score/00
- ====>> http://goo.gl/8KUQl0
- It's very complex thing I thing you should watch this video00
- The credit scores are determined individually from the three major credit bureaus: Experian, TransUnion, and Equifax. The algorithms aren't made known to the public, though. Each bureau calculates it a little differently, and that is why the scores aren't identical even if the information in the report is.
Here are the factors that contribute to your score:
Payment history (35%). Your score is negatively affected if you have paid bills late, had an account sent to collection, or declared bankruptcy. The more recent the problem, the lower your score -- a 30-day late payment today hurts more than a bankruptcy five years ago.
Outstanding debt (30%). If the amount you owe is close to your credit limit, that is likely to have a negative effect on your score. A low balance on two cards is better than a high balance on one.
Length of your credit history (15%). The longer your accounts have been open, the better.
Recent inquiries on your report (10%). If you have recently applied for many new accounts, that may negatively affect your score. Promotional inquiries don't count.
Types of credit in use (10%). Loans from finance companies generally lower your credit score. FICO says this is most important when there isn't a lot of other information upon which to base a score.00
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