Credit Scores:

A credit score is like a mathematical grade or calculation given based on the information found on your credit report. If your credit report is not accurate, your credit score will not be accurate.

FICO scores can range anywhere from 300 to 850. The higher the score, the more likely a borrower will repay the loan.

The scores are calculated using a mathematical formula and software developed by Fair, Isaac & Co. The formula evaluates many different pieces of information found in your credit file, each piece of information is evaluated and put together with other pieces of information and a score is given. Your score considers both positive and negative information found in your file. REMEMBER: Not one piece of information or factor alone will determine your score.

The following is the percentage breakdown of a score:

1. Payment History: 35%
   This is perhaps one of the most important factors in a credit score. It reflects your pay history and if you pay on time. Public Record and collections, reports of events such as bankruptcy, foreclosures, Suits, liens and judgments are all considered serious actions. The older the are the less they will be counted against you.
   Amount You Owe: 30%
   If you owe a lot of money on many accounts, it could reflect that you might be overextended. Part of the science of credit scoring is determining how much is too much for a given credit profile.
   Length of credit History: 15%
   Generally, a longer credit history will increase your score. How long your credit accounts have been established, how recent have you used them and the average age of all your accounts.
   New Credit: 10%
   Are you taking on new debt or shopping for credit ? This part of your score looks at how many new accounts you have, how long it has been since you opened a new account, how many recent requests for credit as indicated on your report as inquiries.

2. Types of Credit in use: 10%
   The score will consist of your mix of credit such as credit cards, retail accounts, installment loans, finance company accounts and mortgage loans. Are some of your loans with high risk lenders or with lower risk lenders?