Credit scores are compiled form five different categories. The five categories are as follows and weigh in by the following percentages into your credit score:
In the payment history category, they are looking for how many accounts you have that are considered “paid as agreed.” Also, the types of accounts will be treated differently. Whether or not you have any late payments and to what degree they are late is looked at. How much is past due will factor into your score.
In the amounts owed category, how much that is owing will factor into the score. The number of accounts with balances will factor into your score, so if you have a balance on all your accounts you will get a large point deduction. Conversely, if you have no balance on all of your accounts, you will get points added to your score. One other factor that is seriously considered is the proportion of credit lines used. Anytime your credit line exceeds 30% of the balance, your score will suffer, and more points will be deducted proportionate to the percentage of total credit line that you owe.
Length of Credit History
In this category, the credit calculators will look at how long your accounts have been open. Typically, this is looked at in terms of average length per account. The longer your average length per account, the better your score will be.
In the new credit category, your score will be affected by the number of recently opened accounts that you have, the number of recent credit inquiries, and time since last credit inquiry. If you run out and apply for many accounts at once, your score will suffer as this would suggest that you are desperate for credit.
Types of Credit
This portion of your score is based on the number of or prevalence of any one type of account whether it be mortgage, installment loans, credit cards, retail accounts, etc.
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