Specifically, what factors go into it and how are they weighted?
For example, I heard that "credit utilization" accounts for 30%
2006-08-14 11:57:24 · 4 answers · asked by Ejsenstejn 2 in Business & Finance ➔ Credit
Your Credit score is based on the following criteria:
35% Payment history: As you can see your payment history is the largest chunk of your score. To keep this high, you must make your payments on time each and every month.
30% Debt to available credit: This is a ratio of the amount of credit you are actually using to the total amount you have available. It's best to use only 30-35% of your credit line. So in this case, if you have several credit cards, it's best to pay down your credit cards to that 30-35% ratio and keep them open, rather than pay off one credit card and close it.
15% Credit history: Any account with less than a 2 year history will detract from your credit score. Try to use your cards sparingly and not open new accounts frequently.
10% Type of credit: Credit that consists of secured installment loans like mortgages and car loans look better than credit that consists of unsecured revolving debt.
10% Inquiries: This is any time you request credit. An inquiry can impact your credit score from 2-25 points depending on what the request is for. You can pull your credit at any time without a negative impact on your score.
Negative credit stays on your report for 7-10 years. Usually if you're mortgage shopping, most lenders are interested in your payment history for the last 2 years.
I hope this answers your questions. If you'd like, please contact me at amkornele@yahoo.com and I will send you a credit scoring booklet which has a ton more detail.
Best wishes!
Anne
2006-08-14 13:50:29 · answer #1 · answered by amkornele 3 · 1⤊ 1⤋
You are correct. I was contracted to write a guide for a local nonprofit. If you skip to the 11th page (Page A), it gives a simple breakdown of how your FICO score is calculated. Real simple explanation. The link is below.
It also has a FAQ page.
2006-08-14 12:24:13 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Go to http://www.myfico.com
This site is the home of the folks who developed the FICO scoring system. They have lots of consumer information about how scores are calculated, and what you can do to improve them.
2006-08-15 08:27:02 · answer #3 · answered by Anonymous · 0⤊ 0⤋
I agree with stopccdebt advise:
2006-08-14 22:56:29 · answer #4 · answered by hen d 2 · 0⤊ 0⤋