What Makes Up a Credit Score?

Credit scores can be complex and difficult to understand. However, it is important to grasp what makes up a credit score so that you know what you have to pay attention to when trying to maintain or improve
your credit score.

Credit Bureaus

There are three major credit bureaus that have credit information and scores on you. These are Equifax, Experian and TransUnion. All three of them will have different scores for you as they calculate things
differently.

Payment History

Your payment history makes up 35 percent of your score. This will include if you made payments on time, how much you paid, and any collections, delinquencies or bankruptcies. Late payments and delinquencies will cause you to lose points in your score.

Amounts Owed

The amount you owe on your credit accounts makes up 30 percent of your score. The percentage of credit used will be ratioed against the amount of credit you have available on individual accounts. The lower the percentage used, the more points you get towars your score.

Other Categories

Length of credit history, new credit, and types of credit used are the other categories that make up a credit score with 15 percent, 10 percent and 10 percent respective weights. The longer the credit history and the less new credit the better your score will be.

Considerations

It is important to monitor your credit reports and scores so that you can make sure the information that is being reported on your accounts is accurate and that your score is being affected by negative things
that you can change.