Ten percent of credit score depends on the type of accounts that individual is having like loan accounts, mortgage accounts and car loans.Ten more percent of credit score allotment will be due to the number of recently opened accounts and how much money that they are contributing for the total amount of credit.The way you payback your loans makes a big value for the credit score and it is up to thirty five percent.
The amount of money that you owe is also a huge contributor and it is going to give thirty percent.The time frame from which you are having credit history give you a weight age of ten more percent. It is called length of credit history.It is over all criteria in general and there may be variations in this with respect to each individual.The credit scoring systems will observe specially about bankruptcy lines, cases and judgments against you and how positive they are.They also look for dues that you have and from how many days that due is existing.
The amount of the due and is that money send for collection by the agencies is also taken into consideration.The number of past dues will be also considered while calculating the credit score.The time gap at which this due or negatives appeared will be also considered to give specific credit score to you.Have you paid to all accounts that you have taken also going to help you to make your credit score better.The most important factor that decides your score is the length of credit history and longer the time frame, better the score is.
To have active credit score you shall have at least one account active for the past six months. This will give enough information for generating score.Your credit score has a serious effect on the possibility of getting a loan or credit from any company. Better the score, higher the probability of getting the approval for the requested loan. It also affects the price that you have to pay for the loan as interest. Better the score you are going to get lower interest rates. Before increasing the credit limit or increasing the interest rate on the existing loan, companies will consider this three digit score. If your magic number is more than 720, you are going to get better deals, offers and lower interest rates.
Even if you are having a bit lower score like 719, the interest that you have is substantially more. It you are scoring at 620,it is very difficult to get the loan and if you get the loan you have to pay dramatically high interest rate when compared with the previous case.
Credit score is a indication of your payment habits in paying the commitments that you have and how reliable you are in fulfilling the deals that you have committed for.Missed payments exist in your reports for seven years.Public report information exists for seven years.Bankruptcies remain in the credit report for ten years.Unpaid tax details will remain in the report for fifteen years.More number of cards with high limits also risks your credit history.
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