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credit score

by professionalseo

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Credit Score –

Check Out Some Of

The Major Facts About

These Numbers


A credit score is a number which is calculated depending upon the analysis of the credit file of an individual.  This is a number which helps the lender or the creditor to decide the creditworthiness of the borrower. A credit score is mainly based on the credit report information which has been reported to the credit bureaus by your lenders or creditors. The credit score, popularly known as FICO scores, range from 350 – 800.


Facts about credit score

You will be surprised to note that credit scores change quite often and this is dependent on various factors. In order to understand the credit score better, you need to know some facts about them. Let’s take a look:


•    Credit score is affected by credit checks

You should note that 10% of your credit score is affected by the number of inquiries or credit checks mentioned in your credit report. Every time, there is a hard inquiry, your scores may get lowered by few points. It should be noted that hard credit checks remain in the credit report for around 2 years.


•    Credit scores depend on types of accounts

Well, 14% of your credit score depends on the types of accounts mentioned in your credit file. It should be noted that there are 4 types of accounts – retail cards, instalment loans, credit cards and real estate loans. One should have a balance of all these types of accounts in order to have a good score. Moreover, it will show that you are capable of managing your finances responsibly.


•    Credit score depends on age of the accounts

15% of your credit score will depend upon the age of your credit accounts. Thus, it is always advised that you maintain your accounts for a long time and do not close down older accounts especially credit cards. Older accounts give the impression that you have managed your finances well for a long period of time. Moreover, this will ensure that positive information stays in your account for a longer period of time than negative information.


•    Credit score depends on credit usage

It should be noted that 30% of your credit score is dependent on your credit usage. It is the amount of money that you spend on accounts that have credit limits. This mainly includes credit cards and other revolving credit accounts. This is also known as utilization rate. This usage actually helps to decide your total balances in comparison to your credit limits. The lower your credit utilization rate, the better chances you have to qualify for a loan.


•    Credit score depends on payment history

Well, 31% of the credit score is dependent on your payment history. Thus, you can well understand the importance of paying of your bills or debts on time.  It should also be noted here that any kind of late payment, once reported by the lender to the credit bureaus, will remain in your credit file for the next 7 years from the date of first delinquency. 


Hopefully, now your idea about credit score is completely clear and you know where to focus in order to build a good credit record.

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