subject: Important Factors Involved In Calculating Credit Score [print this page] Although the exact formulas used to calculate your credit score are not available to the public, you can know the major factors that go into your score. Learning about these helps you focus your attention on improving your score by taking steps to improve in each of the major areas. Your credit score is made up of five major factors:
1. Payment History: The most important factor in your score is how consistently you have made payments on your accounts in the last seven years. Each late payment counts against you, and filing bankruptcy or going through a foreclosure counts against you even more.
2. Balances: Owing a lot of money is bad for your credit score because it shows that you may be financially overextended. Perhaps more than the specific amount you owe, your credit score calculations take into account how much you owe now in relation to how much you originally borrowed or what your credit limit is.
3. Time: The number of years you have been using credit affects your score, with a long credit history helping improve your score. If you havent been using credit for long, just keep your accounts open to build up your history.
4. Variety: Using many types of credit, including credit cards, auto loans, and mortgages, helps improve your credit score. In particular, a good score will have a balance of revolving credit accounts with a credit line and installment accounts with a fixed payment amount.
5. New Credit: Your credit score takes into account what credit accounts you have applied for or opened recently. Improve your score by applying for credit only when you need it.
If you dont know what your credit score is and how you stack up in these five areas, fill out our simple form at CreditNowUSA.com to get your score and get on the road to a higher score. We can also connect you with credit repair specialists if youve had problems in these areas and want to start improving your score.
For more information, go to Credit Score at http://www.creditnowusa.com/Credit-Score
