What are the factors that determine my credit score?
It’s important to understand the factors that go into determining your credit scores so you know how to improve them if necessary. For the FICO® Score 8, there are five main factors that impact your score. They are all weighted differently:
  1. Payment History: Your payment history—how regularly you pay your bills on time—accounts for 35% of your score. Late or missed payments can negatively affect your score, while a pattern of making payments on time is the best way to keep your score high.
  2. Amount of Debt: The amount of debt you have relative to how much is available to you, sometimes referred to as your credit utilization ratio, accounts for 30% of your score. This is calculated by dividing how much credit you use on a monthly basis by the total amount of credit available to you. So if you have three credit cards with a combined credit limit of $10,000, and you have a total combined balance of $3,000 on all three cards, your utilization ratio is 30%. Most experts recommend keeping your ratio below 30%, and for the best scores, below 10%.
  3. Credit History Length: How long you’ve used credit, including your oldest and newest accounts—as well as the average age of all your open accounts—accounts for 15% of your score. Generally, the longer you’ve used credit, the higher your scores.
  4. Amount of New Credit: The total amount of new credit accounts for 10% of your score. This takes into consideration how many accounts you’ve opened recently and how many recent hard inquiries you have on your credit report. Too many new accounts and inquiries could indicate greater credit risk.
  5. Credit Mix: The variety of types of credit you’re using accounts for 10% of your score. If you have different kinds of credit, like credit cards and installment loans, you’ll score higher than if you only have one type of credit, such as retail cards.
Understanding your credit doesn’t need to be hard. Credit Services of America can help you look at your situation and establish a game plan to help you achieve your credit and debt goals. We offer Credit Repair, Tradelines, Student Loan Consolidation, and Debt Settlement. There is no doubt we can help, call us today!
A Goal without a Plan is just a Wish. Give us a call TODAY at 844-FIX-URCR or click on the following link creditservicesofamerica.com to schedule your FREE consultation and create your personalize plan to achieve your credit and debt GOALS! *Individual results may vary. Please call for details and to discuss your own individual situation