What Determines Your Credit Score

We all want to have perfect credit; some of us just really aren't sure how to get there. You may also be wondering what determines you credit score, and in turn what lowers your credit score. Your payment history makes up about thirty five percent of your credit score, on average. When you make a late payment, they factor in three elements, decency, frequency and severity.

They want to know how recent your trouble is, how frequent it is, and exactly how serious your problem is. The higher your balance to limit is also affects your score. This means that you should never carry a balance on your card that is close to your limit on the card. This includes the amount of debt you have and accounts for about thirty percent of your score.

The amount of time that you have carried credit will account for fifteen percent of your score, the longer you've had it the better. Ten percent of your score will be determined by the diversity of credit you have. This means different types of credit, bank credit cards, store cards, or different types of loans, for instance auto loans. The last bit of your credit score is determined by how much credit you apply for. If you have excessive inquiries with lenders, this of course looks negative on your account.

It is important to understand exactly what determines your credit score so you can avoid doing the things that make your score lower. If you know that you score needs to improve note these things and be sure to improve yourself and make sure you are doing what is necessary to have a great credit score!

Contributing National Payday Staff Writer

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