What Factors Contribute to My Credit Score?

Your credit score is a three-digit number that represents your creditworthiness and is calculated based on information in your credit reports. The following factors contribute to your credit score:

1. Payment History (35%): Your payment history accounts for 35% of your credit score. This includes:

   a) On-time payments

   b) Late payments

   c) Accounts sent to collections

   d) Bankruptcies

   e) Foreclosures

   
   

2. Credit Utilization (30%): Your credit utilization ratio, which is the amount of credit used compared to the amount of credit available, accounts for 30% of your credit score. This includes:

   a) Credit card balances

   b) Credit limits

   c) Credit utilization ratio (e.g., using $500 of a $1,000 credit limit)

3. Length of Credit History (15%): The length of your credit history accounts for 15% of

   a) your credit score. This includes:

   b) Age of oldest account

   c) Average age of all accounts

   Length of time since accounts were opened or closed

4. Credit Mix (10%): The types of credit you have, such as credit cards, loans, and mortgages, account for 10% of your credit score. This includes:

   a) Credit cards

   b) Installment loans (e.g., car loans, personal loans)

   c) Mortgage loans

   d) Other types of credit (e.g., student loans, home equity loans)

5. New Credit (10%): New credit inquiries and accounts account for 10% of your credit score. This includes:

   a) New credit applications

   b) New accounts opened

   c) Credit inquiries (e.g., when you apply for credit)

Other factors that can affect your credit score include:

• Credit inquiries: Applying for multiple credit cards or loans in a short period can negatively affect your credit score.

• Credit account closures: Closing old accounts can negatively affect your credit utilization ratio and credit history.

• Credit limit increases: Increasing your credit limit can positively affect your credit utilization ratio.

• Public records: Bankruptcies, foreclosures, and tax liens can significantly lower your credit score.

• Credit reporting errors: Errors on your credit report can negatively affect your credit score.

To maintain a good credit score, it's essential to:

• Make on-time payments

• Keep credit utilization low

• Monitor your credit report for errors

• Avoid applying for too much credit at once

• Keep old accounts open to maintain a long credit history

Remember, credit scores can vary depending on the credit scoring model used. The most widely used credit scoring models are FICO and VantageScore.