2007-03-05 13:09:14 · 8 answers · asked by stillcole 2 in Business & Finance ➔ Credit
* 35 percent of the score is based on your payment history. This makes sense since one of the primary reasons a lender wants to see the score is to find out if (and how timely) you pay your bills. The score is affected by how many bills have been paid late, how many were sent out for collection, any bankruptcies, etc. When these things happened also comes into play. The more recent, the worse it will be for your overall score.
* 30 percent of the score is based on outstanding debt. How much do you owe on car or home loans? How many credit cards do you have that are at their credit limits? The more cards you have at their limits, the lower your score will be. The rule of thumb is to keep your card balances at 25% or less of their limits.
* 15 percent of the score is based on the length of time you've had credit. The longer you've had established credit, the better it is for your overall credit score. Why? Because more information about your past payment history gives a more accurate prediction of your future actions.
* 10 percent of the score is based on the number of inquiries on your report. If you've applied for a lot of credit cards or loans, you will have a lot of inquiries on your credit report. These are bad for your score because they indicate that you may be in some kind of financial trouble or may be taking on a lot of debt (even if you haven't used the cards or gotten the loans). The more recent these inquiries are, the worse for your credit score. FICO scores only count inquiries from the past year.
* 10 percent of the score is based on the types of credit you currently have. The number of loans and available credit from credit cards you have makes a difference. There is no magic number or combination of types of accounts that you shouldn't have. These actually come more into play if there isn't as much other information on your credit report on which to base the score.
2007-03-05 13:30:54 · answer #1 · answered by Faye H 6 · 0⤊ 0⤋
Credit scores are based on your ability and willingness to pay your bills on time. Paying by cash does not impact your credit score. When you are late in payments, it counts against you. If you have too many credit cards, and occasionally go over the limit, this costs you. If you have a vehicle and can't reach an agreement with that lender, you still have to pay the bill until it's straightened out in court. So tell your friends who may not know, that driving a car back to the dealership doesn't alleviate you of your problems. They will sell the car and minimum cost and have a judgement filed against you. This also negatively impacts your credit score.
2007-03-05 13:13:55 · answer #2 · answered by Venita Peyton 6 · 0⤊ 0⤋
What affects your credit score is the way you pay your bills and how much available credit you have. If you pay all your bills on time, its- Good. If you have 10 credit cards with $20,000. available credit-Bad. Also, if your credit reports shows a lot activity where creditors are checking your credit, such as when you get ready to buy a car or a house - bad.
Your credit report doesn't show your number of purchases, only balances on lines of credit, credit cards, car loans, home loans, etc.
All these items are taken into account to create your credit score.
2007-03-05 13:19:21 · answer #3 · answered by Cotton 3 · 0⤊ 0⤋
Neither one has an impact on a credit score. What primarily matters is that one doesn't go over their limit on the credit card and that one can make at least the minimum payments before the due date.
2007-03-05 13:13:57 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Neither.It is how you pay your accounts that determines the score.A computer program monitors you and when you default,it raises a red flag to the accounts dept.and then they will contact you.However,should you make 3 consecutive payments to the same creditor,you will go right to the top again and be offered even more credit to hang yourself with.Ifyou can't afford it now,you can't afford it.Let it go and save.
2007-03-05 13:15:49 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Neither.
Creditors look at your ability to repay, factoring in your income to debt ratio, with payment history.
They also consider number of inquiries.
2007-03-05 13:14:53 · answer #6 · answered by The Rabbi 5 · 0⤊ 0⤋
how much you spend will impact your score more.
2007-03-05 13:16:33 · answer #7 · answered by Sufi 7 · 0⤊ 0⤋
Ability to pay it back.
2007-03-05 13:17:04 · answer #8 · answered by nursesr4evr 7 · 0⤊ 0⤋