![]() FICO also has multiple score models in use. You are likely to have a general FICO score calculated based on your Experian credit report, your Equifax credit report, and your TransUnion credit report. FICO produces the most commonly used credit scores. Importantly, you don’t have one credit score. And you may not know what score they are using-this will vary among lenders and service providers. The score that matters is the one that is being used by a lender or service provider to make a decision about you. This can be confusing because people don’t know which score matters. Many different companies make and produce credit scores. Some of them sell their scores directly to consumers. Your score may go down if you apply for a lot of different credit at once or open a lot of new credit. Rate shopping within a category-shopping for car loans or mortgages, for example-does not negatively affect your scores. But it will only affect your scores for 12 months, and the impact is relatively small. When a lender requests your credit report or score to evaluate you for credit, this may affect your score. When you request your credit report directly from a credit reporting agency or an organization authorized to provide credit reports, your score is not affected. How many new accounts have you recently opened? The information for this portion of your score comes from inquiries. ![]() Do you have and manage revolving credit (credit cards) and installment loan(s)? Your score may be lower if you only have one kind of credit.ġ0% of your score is based on new credit. How long have you owned credit accounts? How old is your oldest account and newest account? What is the average age of all of your accounts? How long has it been since you used some of your accounts? Your score may be lower if you have a relatively short credit history or your some of your credit has been dormant.ġ0% of your score is based on your credit mix. ![]() You seem to be carrying too much debt overallġ5% of your score is based on the length of your credit history.Your debt balances don’t gradually decrease.Use too much of your available credit limit-your credit utilization rate is too high.Are your account balances declining compared with the amount you originally borrowed? Are you only using a small percentage of your available credit limit (this is also called credit utilization rate)? Have public record items (although the older these are the less impact they have on your scores)ģ0% of your score is based on the amounts you owe.This part of your credit score also includes public record items: Department store cards and other retail accounts.Do you pay your bills on time and as agreed? The following accounts are used to calculate this part of your score: In general, FICO scores give different weight to different information in your credit report:ģ5% of your score is based on your payment history. ![]() There are several businesses that produce and sell credit scores, but the most commonly used scores in decision making are produced by FICO. Improving scores starts with an understanding of what goes into them. Many people may also not know how to improve their scores. In general, the higher your credit score, the more likely you are to be approved for credit and services and the less you will pay in interest, fees, and other costs associated with credit or services. They are designed to predict the likelihood that you will pay your loans and bills as agreed. Credit scores are numbers calculated based on information in your credit report. Many people know that a credit score is a number, but they don’t know what that number means. ![]()
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