How Is Your Credit Score Calculated?

 Your Track Record:

Lenders need to know if you pay your bills on time. Your score takes into account the last time you missed a payment, how late you were, and how much you owed. It also weighs how many accounts have never been late.

How Much You Owe:

Lenders want to know how much credit you have available and how much of it you have used. So when you apply for a mortgage, lenders may consider how much debt you would have if you maxed out all of your cards.

Length of Record:

Lenders like to see a long history of paying bills on time, but it is not a deal-breaker if you have a short, unblemished record. This section also weighs how long it has been since you used certain accounts.

New Credit:

Are you applying for lots of credit? That can be a red flag to lenders. This section takes into account how long it has been since you got a new card.

 Types of Credit:

How is your credit “mix”? The score takes into account what kinds of credit you have – credit cards, retail accounts, installment loans, finance company accounts and mortgage loans. This is more important when there is little other information in your account.