e Payment history The more you pay bills in full and on time, the more creditworthy you appear. e Credit utilization Credit utilization is the percentage of available credit that you use. For example, if you have a credit card with a $5,000 limit and a $2,000 balance, your utilization would be 40 percent, or 2,000 divided by 5,000. Try to keep utilization low—less than 30 percent is recommended. e Length of credit history The more experience you have managing debt and paying bills on time, the more creditworthy you seem to financial institutions. e Types of credit Having various types of credit—like credit cards, revolving loans or installment loans—shows that you can manage multiple financial obligations. e New credit Taking out a new loan changes your financial situation. The increased debt can make lenders cautious about lending you additional credit as there often is not enough payment history to determine how well you’re able to manage this new obligation.
How your score is calculated.
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