How does credit score work?

Question

Is mine bad? I have always paid my bills on time and I have no dues.

I've never had a credit card before.

Answer 1

4r example 100-25=75 fantastic keep it up.

Answer 2

A credit score determined by Fair Issac Corporation is a Bankruptcy indicator. The score can be between 350-850 and I have never seen a score over 811 or below 408. The way it works while complicated is depending on how you pay your bills and how much revolving debt you have and how much of that revovling debt is available and how much credit you have applied for affects your score. It is one of the only models in the world that subtracts from a perfect score to determine your score most add.

In simplistic terms it is like this the score is recalculated every nite and everybody starts with an 850 and then they subtract from late payments, credit cards that are at their limits, too many inquiries previous or current bankruptcy, repossessions, foreclosures all take points off your score the more recent the action the more points off the score. No one knows exactly how many points are deducted except the people at FICO but I have seen were a late payment on a mortgage will lower your score by 80 points overnite and a credit card by 30 points.

If you want to buy a house with a conventional mortage you need a minimum middle score of 620 and that is the same for an american express green card, however if you want to a platinum card from american express you will need a minimum score of 680 and must be in bearue for 36 months with 4 tradelines that are open and paid satisfactory which means on time.

Don't mess up your credit when your young because it can haunt you for years in the future when you go to buy a car or a house or start a business.

Answer 3

Unfortunately, in many cases, simply paying regular bills is not enough. Most utility/cell phone/rental companies do not actually report positive payment histories, but rather choose to only say something when you screw up and are late.

It sucks, but that's the state of things.

Don't worry though, there are plenty of ways to build good credit without having to actually get in debt.

A great way is to sign up for a credit card, use it for your regular expenses (food, gas, etc), and then pay it off every month. This will give you a positive payment history and will help build your credit.

Now, you also need to understand that potential lenders are interested in TWO aspects of your credit history. One is your payment history, but another is your total borrowed/paid history.

For example:
1) If you have a lot of debt, lenders will be less likely to lend to you even if you are paying regularly on that debt.
2) If you have never borrowed any sizable amount of money, lenders will be more cautious about granting you a large loan.
3) If you HAVE borrowed a sizable amount at some point (like financing a car), and have successfully paid it off, you will appear to be a responsible and reliable borrower.

I started with a Capital One card and another Visa card from "pre-approved" applications that I got in the mail. From there, I was able to eventually finance my own car... and since I've never been late, my credit is golden.

Good luck

Answer 4

there are over 1,700 calculations that go into a credit score

you will need to check with one of the big three agencies
and pay a fee ($10-$25) to see what you have -

or apply for credit card - and ask how you scored?

should be pretty good!

weeelllllllllll - you may need to get a credit card to build your
history = what bills are paid on time - do they report to the credit agencies?

mortgage? car loan?

PS my Credit Card has 21% interest - and I have never paid a
dime in interest to them - HOW? I pay the balance off every month!

and that builds credit - mine is over 800

Answer 5

Stay away from the credit cards and dont worship at the alter of the almighty fico score(I Love Debt Score). You dont need a credit score to get a home loan either. You can get a home loan with a lender that does manual underwriting. The way it use to be done before this stupid thing called the fico score came about.

To have a high I Love Debt Score (fico score) you have to stay in debt and pay debt alot and often. You dont win with money that way. the banks do.

go to daveramsey.com and listen to his radio show. He has lots of good advice on money and debt. Sure did change the way i look at it.

Answer 6

Utility bills do nothing for your credit score, unless you don't pay. If you're trying to establish credit, you may want to open a joint account with someone in a small store.