The credit score is also referred to as a FICO Score and is a mathematical formulae created by Fair Isaac and Company.The credit score is used by most companies to see if you are a good credit risk or not. Equifax and Trans Union will crunch the numbers from the credit report, and spit out a number somewhere between 300 and 900, or even no number or R for Reject. A score over 680+ is considered excellent.
FACTOR
|
WEIGHT |
POINTS |
||
Payment History: Bankruptcies, late payments, past due accounts and wage attachments, collections, judgments | 35% | 315 | ||
Amounts Owed: Amount owed on accounts, proportion of balance to total credit limit |
30% | 270 | ||
Length of Credit History: Time since accounts opened, time since account activity |
15% | 135 | ||
New Credit: Number of recent inquiries, number of recently opened accounts |
10% | 90 | ||
Types of Credit: Number of various types of accounts (credit cards, retail cards, mortgage, line of credit, loans etc) |
10% | 90 | ||
POTENTIAL TOTALS | 100% | 900 |
Pay off credit card debt instead of moving it around to lower rate cards. Moving balances to other credit cards and closing out the old account can hurt the score