Thursday, September 27, 2007

The Key Factors that Determine Your Credit Score

  1. Paying your Bills
    The most important factor is how you’ve paid your bills in the past, placing the most emphasis on recent activity. Paying all your bills on time is good, paying them late on a steady basis is bad. Having accounts that were sent to collections is worse. Declaring bankruptcy is worst.
  1. Amount of money you owe and the amount of available credit
    The second most important area is your outstanding debt which means how much money you owe on credit cards, car loans, mortgages, home equity lines, etc. Also considered is the amount of credit you have available. If you hold possession of 15 credit cards that have a $10,000 credit limit, that’s $150,000 of available credit. People who have a lot of credit available tend to use it, which makes them a less attractive credit risk.
  1. Length of credit risk
    The third of factor is the length of your credit history. The longer you’ve had credit, the more points you get.
  1. Mix of credit
    The best scores will have a mix of both revolving credit, such as credit cards, and installment credits such as mortgages and car loans.
  1. New credit applications
    The final category is your interest in new credit, how many credit applications you’re filling out. The model compensates for people who are rate shopping for the best mortgage or car loan rates. The only time shopping hurts your score, is when you have previous recent credit stumbles, such as late payments or bills sent to collections
For more info and to order your credit report with FREE credit score please visit www.reliacredit.com

1 comment:

sweet apple said...

Hi,

Thanks for sharing this information about "The Key Factors that Determine Your Credit Score". It's very precise and understandable. I'll share with you an article "What Comprises Your Credit Score", basically, It's somewhat related to your post. Feel free to check it out if you have time. Anyways, great blog! :)

The Key Factors that Determine Your Credit Score ~ ReliaCredit.com - How's Your Credit? - Blog