Credit Score Anatomy

Do you know your credit score anatomy? I don’t remember lessons about it in school alongside other anatomy… But it turned out to be pretty important out in the real world! Since no one made a point to teach us in school, let’s go over what determines your credit score.

First, What’s the Point?

Assuming you already basically know what a credit score is for (getting better loans, approval for housing, etc.), let’s fill in a couple details. While there are other scoring models, the one to remember is FICO, which is determined by the Fair Isaac Corporation. On their scale of 350 to 850, over 700 is the goal. With a FICO score over 700, your borrowing opportunities open up, and your interest rates go down! On the other end, scores under about 650 have a difficult time getting approved for even small loans and credit cards. With these things in mind, let’s get into what you came here for!

Credit Score Anatomy

There are 5 components to a FICO score, which means 5 ways that anyone can work to increase their score! We’ll go through them one by one.

Payment History (35%): Basically, do you pay bills on time? Never be over 30 days late on a bill, and make a payment plan before those 30 days to protect your score!

Credit Card Capacity (30%): What percent of your credit limit is currently in use? No matter how much or little your limit is, stay near 10% usage as much as possible!

Length of Credit History (15%): Not much you can do about this one, but you can expect your score to go up over time even if you just keep the rest right where it is!

Types of Credit (10%): This section want you to have at least one each of a mortgage, installment account (like an auto loan), and revolving account (usually a credit card). The credit card is the most important, so don’t forget one!

New Credit (10%): There are many factors to this part, but mainly you benefit most by not opening new accounts and keeping old accounts open.

And that’s what makes up a credit score! Knowing the ins and outs can help you make more informed decisions about how to build your credit independently. This saves you time and money when it’s time for a boost with companies like us! For more info about credit scores and services that can help, check out the rest of our website. Happy credit building!

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