When you think of a credit score, what comes to mind?
Is it a singular system used to grade your creditworthiness or a thousands of sets of complex algorithms created by hundreds of companies?
The answer doesn’t really matter because just about every credit scoring formula focuses on 5 main components of your credit report in order to calculate your credit scores.
So let’s go over them and see what your credit score is made of.
Payment History – 35% of your Credit Scores
How well you pay your bills on time.
Utilization Rate – 30% of your Credit Scores
The amount of available credit you have at your disposal.
Length of Credit History – 15% of your Credit Scores
The average length your active accounts have been open.
Mix of Credit – 10% of your Credit Scores
Your utilization of both installment and revolving loans.
New Credit / Inquiries – 10% of your Credit Scores
Your applications for credit.
CreditFirm.net works on improving your credit scores by working on improving these 5 factors in your credit reports.