What Factors Determine Your Credit Score

What Factors Determine Your Credit Score

A number of folks have gone through difficult financial times in recent years, and they wonder what factors decide their credit scores.

Credit scores range between 300 and 850.  Usually scores above 620 are considered desirable for obtaining a mortgage.  The following factors will affect your score.

(1) How much are you are in debt?  Owing a great deal of money on numerous accounts can be a sign you are overextended.

(2) What is your payment history?  Do you pay your credit card accounts on time?

(3) How much of your credit is new?  Even if you have been making payments promptly, new credit - either installment payments or new credit cards are considered more risky.

(4) How long is your credit history?  The longer the better!

(5) What types of credit do you use?  Generally, it is more desirable to have more than one type of credit-installment loans.  Credit cards, a mortgage, or car payment, for example.

For greater understanding and evaluating your credit score, go to http://www.myfico.com.