Lenders use credit scores to measure a borrower's creditworthiness. Although several different companies offer credit scores, the Fair Isaacson Corporation or FICO is the one that is most often used.
FICO uses five key components to determine a borrower's overall credit score or rating. The highest percentage, 35 percent, is judged on payment history which shows whether the borrower made timely payments and adhered to the terms of the credit agreement. An adverse effect on this part of the score would be late payments, missing payments or going into default. CONTINUED READING--->
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