What Makes Up a Credit Score?
Your credit score is the most important factor when determining whether you qualify for a loan. When you submit an application for a mortgage, car loan, or credit card the potential lender will check you scores with the three credit bureaus: TransUnion, Equifax, and Experian.
If you understand what makes up your credit score, you can use that information to make your score go up or down. Of course our goal would be to increase it as much as possible.
FICO's website explains what factors make up your total credit score:
Payment History - 35%
Amounts Owed - 30%
Length of Credit History - 15%
New Credit - 15%
Types of Credit Used - 10%
This information doesn't just tell us what the credit scores are made of. It can also tell us at least 5 ways to increase your credit score.
My next 5 posts will focus exactly on that. How to increase your score by affecting the factors that FICO uses to determine your score.