What affects credit score?

What affects credit score?

You must be wondering exactly what the factors that affects our credit score are. Let’s come straight to the point. Credit scores are the three-digit numbers assigned to you which again defines your financial behavior and on the basis of which your creditworthiness is judged.

On which factors the credit score is calculated:

The factors that are considered while calculating the Fico Score is as followed:

The Factor	Percentage of dependence
History of Payment	35%
Amount of Debt	30%
The total span of credit history	15%
Variety of credit	10%
Recent credit applications (new)	10%

The credit score in itself has its pros and cons. It is the most essential part of our financial lives. Repairing and building of the credit is taken very seriously by all of us. It helps us in many ways.

· To get a credit

· To find a good job

· To get the best comparable rates

· To bet for the best mortgage

These are the abstract ideas provided for you to understand the importance of what the score can do to your life. If we think financially we find the score very important but if we delve deeper we find that it is required at every step of our daily life. Life in America thrives on credit thus maintaining an established credit rating makes you stable. How the scores affect you in a positive and negative way? Get the clear picture here.

Check what affects the score positively:

• Full bill payment on time.
• Keeping your balance low. Credit usage should be 25% or less.
• Steady job. This gives an impression of your stability and responsible behavior.

Know the factors that affect your credit score negatively:

· Late or missed payments/defaults

· Using more than 80% of the total amount of available credit you have

· Foreclosures or liens

· Random requests for new credit

· Period of redundancy and of course

· Bankruptcy

You have to be aware of your report so much so that you can maintain and work upon the weaknesses. Know the positives of your report and the strength of your financial behavior, maintain it. Understand the cons and improve on it. Discuss with people from the industry and various walks of life and develop on the negatives of your report.