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What goes into your Credit Score?

Posted by Tom Henell on Thu, Dec 15, 2011 @ 02:57 PM

We frequently hear messages about the importance of maintaining a good Credit Score.  Your Credit Score impacts your ability to not only obtain credit, but how much you will ultimately pay for that credit.  Today, credit scores are used for almost everything including, credit cards, mortgages, jobs, rentals, and insurance.

But, whether your Credit Score is 560 or 790, how is it calculated?

Your Credit Score is determined by:

35% is based on your payment history

30% is based how much you owe, and how much of your available credit is being used

The remaining 35% is based on credit history

- How long each account has been opened (15%)

- How many new credit accounts (10%), and

- The types of credit card debt (10%)

Demographics such as age, gender, race and religion, marital status do not play a role in your credit score.

Under the Fair and Accurate Transaction (FACT) Act, at your request, Equifax, and each of the other 2 major credit reporting agencies, Experian and TransUnion, will provide you with one free credit report every 12 months.

However, Credit report disclosures do not include credit scores. Your credit score disclosure must be purchased separately. However, you can request to purchase your credit score disclosure when you request your free annual credit file disclosure.

Tags: Credit Report, Credit Score