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Your Credit Score Explained
Your credit score is calculated from a variety of credit data that
can be found in your credit report. This data can be grouped into
five general categories as shown below. The percentages in the chart
reflect the importance of each category in determining your score
based on the general population. The importance of these categories
may be somewhat different for specific groups of the population such
as: "People who have not been using credit very long".
Payment History
- Account
payment information on specific types of accounts (credit
cards, retail accounts, installment loans, finance company
accounts, mortgage, etc.)
- Presence
of adverse public records (bankruptcy, judgements, suits,
liens, wage attachments, etc.), collection items, and/or
delinquency (past due items)
- Severity
of delinquency (how long past due)
- Amount
past due on delinquent accounts or collection items
- Time
since an occurance of "past due items", "delinquency",
"adverse public records", or "collection
items"
- Number
of past due items on file
- Number
of accounts paid as agreed
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Amounts Owed
- Amount
owing on accounts
- Amount
owing on specific types of accounts
- Lack
of a specific type of balance, in some cases
- Number
of accounts with balances
- Proportion
of credit lines used (proportion of "balance"
to "total credit limit" on certain types of revolving
accounts)
- Proportion
of installment loan amounts still owing (proportion of "balance"
to "original loan amount" on certain types of
installment loans)
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Length
of Credit History
- Time
since accounts opened
- Time
since accounts opened, by specific type of account
- Time
since account activity
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New Credit
- Number
of recently opened accounts, and proportion of accounts
that are recently opened, by type of account
- Number
of recent credit inquiries
- Time
since recent account opening(s), by type of account
- Time
since credit inquiry(s)
- Re-establishment
of positive credit history following past payment problems
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Types of Credit Used
Number of various types of accounts (credit cards, retail accounts,
installment loans, mortgage, consumer finance accounts, etc.)
Please note that:
A score takes into consideration all these categories of information,
not just one or two.
No one piece of information or factor alone will determine your
score.
The importance of any factor depends on the overall information
in your credit report.
Different factors may be more important for different people
in determining their credit score. In addition, as the information
in your credit report changes, so does the importance of any factor
in determining your score. Thus, it's impossible to say exactly
how important any single factor is in determining your score - even
the levels of importance shown here are for the general population,
and will be different for different credit profiles. What's important
is the mix of information, which varies from person to person, and
for any one person over time.
Your Credit Score only takes into consideration information found
in your credit report.
However, lenders may take into consideration additional information
such as your income, how long you have worked at your present job
and the kind of credit you are requesting.
Your Credit Score is based on both positive and negative information
from your credit report.
Late payments will lower your score, but establishing or re-establishing
a good track record of making payments on time will raise your score.
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