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Highlandspring Asked About 'Credit Scores '

What are the most important elements of a credit ...

What are the most important elements of a credit score? I assume that the biggest factor are the payment history on things such as loans and mortgages and salary?

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5 Answers

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jerome.christopher Answered:

Following are the five essential elements of determining a credit score:

Payment History determines 35% of your credit score, with the most emphasis given to recent activity. Make sure you're paying your bills on time. If you've missed payments in the past, do your best to get current.
Amounts Owed accounts for 30% of your credit score. Keep your outstanding debt as low as you can. Remember, it's better to pay off debt than to move it around.
Length of Credit makes up about 15% of a person's credit score. The longer you can show a responsible credit history, the better it is for your credit score.
New Credit Accounts determine about 10% of your credit score. Credit bureaus distinguish between a search for a single loan and a search for too many new credit accounts. So, if you're shopping for credit, make sure you do it within a particular amount of time. The golden rule for new credit? Get it only if you need it.
Types of Credit in Use determines approximately 10% of your credit score. A mixture of account types generally scores better than reports with only revolving accounts, such as credit cards.

Posted 3 years ago
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RateNerd Answered:

Yes there is a “secret sauce” formula used to calculate your credit score, and each reporting credit bureau has it’s own recipe. If you want to get the lowest rates and largest credit lines for your loan or credit card, you need to have a great score - somewhere above 720 in most cases. This article outlines the five key ingredients used in determining your credit score, and start taking the right steps now to make sure your number is high:

http://ratenerd.com/credit-score-secret-sauce-how-credit-bureaus-calculate-your-credit-score-1193

Posted 3 years ago

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Thomson Joseph Answered:

Jerome has given a very nice break up of the important elements of the Credit Score. There are five major areas upon which you're being judged. They are:

1. Past payment history: 35%
2. Amounts owed: 30%
3. Length of credit history: 15%
4. Amount of new credit: 10%
5. Types of credit: 10%

Posted 2 years ago

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Cherish7 Answered:

Getting approved for a loan or credit card application depends on your credit history. Like if you pay your bills on time. Your credit interest also depends on your credit score.

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