myFico: What's in your score? By: Andrew & Ayannah

*The 5 categories for your credit score vary for many people. Ex) If you use credit cards longer compared to a person who has not been using as long will be factored differently. The importance of one factor varies for people.

Payment - lenders take note of your past job, and the kind of credit. Fico scores intake both positive and negative credit in your report.                                                                              

Credit History- Credit score is calculated from credit reports. Lenders look at many things when making credit decisions, such as income & how long you worked at present job & kind of credit requesting.

*Length of credit history 15% - how long your credit accounts have been established, including the age of the oldest account, new accounts, average age.

•How long/specific account been established                                                                                  •How long it has been since they have used certain accounts.                                                        •So it’s good to make sure everything is up to par.

*Types of credit in use 10% - Fico scores will consider your mix of credit cards & retail accounts, installment loans, finance company accounts & mortgage loans.              

•Late payments - can lower your credit score                                                                          Paying bills on time will higher your credit score                                                                           •Good credit score means a good credit score                                                                              When you manage your credit card use, it makes it go higher.                                                  If you close an account it doesn't make it go away, the history is still there.

*Payment history 35% - Lenders want to know if you paid past credit accounts on the due dates. (Most Important One)

•They’ll look into if you had any negative factors like bankruptcy, foreclosures, etc. Credit cards like visa, mastercard, retail accounts (department stores),& installment loans count as payment history.

•Also it shows how late you were for payments, how much was owed, how recent & many.

*Amount owed 30% - having a credit account and owing a minimum amount of money does not include that you're a higher risk borrower.

•However if a person’s high percentage of available credit is used then they are most likely to be late on payments. It will show the amount you owe on all your account’s, and show how you’re able to balance out everything.

*New credit 10% - When people open new accounts it shows that they are at a greater risk of being a unloyal customer since, they usually open up many credit cards.

•Since you’re new they’ll look into how you shop for credit. Also if you open up a lot of new credit, they could look back to see the age of your other credit’s. Plus if you have a lower age on credit, that could really take a toll on you.

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