3 Important Credit Score Factors
your credit score takes a number of factors into consideration, but just three of those factors make up 80% of your score. they are, one, payment history. your payment history accounts for 35% of your credit score. lenders want to know that if they lend you money, you'll pay it back as promised. the payment history component of your credit score looks at whether you make credit card ? long payments on time. if you're late, it looks at how many days late you are and how often you make a late payment. it also ? whether you have any charge-offs, debt settlements, bankruptcies, foreclosures and so on. any of these negative items can greatly lower your score. two. amounts owed. how much you owe accounts for 30% of your credit score. this component of your credit score will be highest, if you regularly use no more than 25% of your total available credit. say, you have three credit cards, each with a $1,200 credit limit, and your total available credit is $3,600. to keep ? 25%, you should try not to use more than $900 across all three cards at any given time. three. length of credit history. the length of your credit history makes up 15% of your credit score. it looks at how many years you've been using credit, because more experienced credit users are believed to be more responsible. however, a person with a short credit history can still have a good score, if they manage credit responsively. your credit score can impact almost every area of your life, from where you live to what you drive. if you understand the three things that affect your credit score the most and make sure that they work in your favor, you'll be the one calling the shots, not the creditor.
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