subject: What Determines Your Credit Score? [print this page] The world of today is virtually built on credit. And, as a result, your credit score is an integral part of your everyday life. Your credit score is checked by a number of entities such as your landlord when renting an apartment, your utility company when having gas delivered to your home, and sometimes even a job before you are hired.
When computing your credit score, a number of different factors come into play. Some of the most important ones are discussed below.
For instance, an aspect of your total score is calculated on the amount and percentage of outstanding debt that you are carrying. Another part is based on the amount of credit inquiries sent to the various credit reporting agencies. In general, the more inquiries requested for your credit information, the more of a negative effect it has on your credit score.
A little less than one sixth of your credit score is predicated how long your credit history is. This is the reason that, in large part, a teenager with no or minimal credit history has a much lower credit score versus a 55 year old single male with a thirty five year plus credit history. Other things impacting your credit score are your payment history, the percentage of new credit that you hold, and even the type of credit lines that you have open.
Your credit report has what may seem like non-financial information in it as well. For example, it will reveal information about the neighborhood you live in, where you work, the number of years at your current job, and so on. And it contains information as to whether you have ever filed for bankruptcy.
Of all the things that can possibly affect your credit opportunities later in life, your credit score has to be near the top of the list. For instance, usually the higher your credit score, the less you can expect to be charged for interest on the money that you borrow. The higher your credit score, the less likely you will be asked to put a down payment on merchandise. And the higher your credit score, the more additional credit you will be eligible for. There are tons of other advantages as well. In fact, over the course of a lifetime, a person with an excellent credit score can save thousands of dollars over a person with a poor credit score.
By simply taking a brief glance at your credit score,a creditor can make a realistic determination of if you are living outside of your means and, as a result, might have difficulty repaying the loan. This is why it is important to know exactly what is in your credit report. When you get a hold of it, check it thoroughly for any inaccurate information and act to correct it as soon as possible.
