Factors Affecting Your Credit Score And Why It Matters
Know your credit score. Financial institutions use three main services to provide credit scores: TransUnion (800.680.7289), Equifax (866.640.2273) and Experian (800.520.1221).
You can access all three from a variety of sources on the web. I used myfico.com and purchased all three reports for less than $50.
• Payment history - 35%
• Amounts owed - 30%
• Length of credit history - 15%
• New credit - 10%
• Types of credit used - 10%
The median FICO® score in the U.S. is 723.
While the criteria will vary slightly from bank to bank, a score of 850 is perfect and 750 is very good.
My banker source for this article said her bank is making very few loans at this time to customers with scores below 700. Another banker told me he is OK with 675. Scores of 650 or less will require some explaining.
Factors affecting your credit score:
1.Your payment history. Your lender has one main concern, will you pay your bills in full and on time?
2. Your outstanding debt. The more credit cards you have maxed out, the lower your score. Keep the monthly unpaid balance at 25% or less of your limit.
3. The length of time you have been building credit. Longevity counts. One way to improve your score is to hold on to and use your older credit cards.
4. The number of inquiries on your credit report. Your credit score takes a small hit every time you apply for a new card or a loan.
Try www.smartmoneydaily.com/personal-credit for more information on how to understand and improve your credit score.
Disclaimer: The information and opinions contained on this site are for discussion purposes only and are NOT intended to serve as legal, accounting or investment advice. ©2008 Jerry Hayes, OD. Not to be reproduced without written permission of the author.
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I recently got a call from
I recently got a call from Dunn and Bradstreet trying to sell me on tracking my D&B score. Supposedly the labs and vendors report business stuff to them and when your practice needs to borrow, that is as important as your personal score. Any comment on D&B scores?
I am not an expert on credit
I am not an expert on credit scores. However, my banker told me that yes, using too many credit cards will negatively affect your credit score. If you have a lot of cards out, lenders see this as 'potential risk'.
But, if you don't don't borrow any money or use any credit cards, that is a negative also. You have to strike a happy medium to establish good credit.
If you have too many cards, my banker advised canceling the newer, less used cards and keeping the older cards in service. She said the longer, the better, assuming you have a good payment record.
I have heard that canceling a
I have heard that canceling a credit card can cause your credit score to decrease. Is that true? Or is it better to hang on to it and just use it rarely but use it and keep it open...particularly if you have had it for awhile. Doesn't the amount of open credit on credit cards that you could access work against you? What should you do IF you have a lot of credit available to you via credit card accts. and have several that you do not really use?
I load up my credit card with
I load up my credit card with lab expenses. Although I pay them off every month, this has negatively affected my credit score!