What is your Credit Score?  

Your credit score is a snapshot of your credit risk that predicts the likelihood of serious delinquency within 24 months. The FICO score is developed by Fair, Isaac and Company.  The higher the FICO score, the lower the risk. Below is a breakdown of what affects your score.

     ·         Payment information on many types of accounts.

     ·         Public record and collections items (bankruptcies, foreclosures, and judgments.)

     ·         Details on late or missed payments (“delinquencies)

     ·         How many accounts show no late payments?  

2.      Amounts Owed (Approximately 30% of your score is based on this category)

     ·         The amount owed on all accounts, and on different types of accounts.

     ·         Whether you are showing a balance on certain types of accounts.

     ·         How many accounts have balances

     ·         How much of the total credit line is being used on credit cards and other “revolving credit”

     ·         How much of installment loan accounts is still owed, compared with the original loan amounts. 

3.      Length of Credit History (Approximately 15% of your score is based on this category)

     ·         How long your credit accounts have been established in general.

     ·         How long specific credit accounts have been established.        

     ·         How long it has been since you used certain accounts. 

4.      New Credit (Approximately 10 % of your score is based on this category)

     ·         How many new accounts you have.

     ·         How long it has been since you opened a new account.

     ·         How many recent requests for credit you have made, as indicated by inquiries to the credit reporting agencies. 

                   Inquiries stay on your credit report for two years, although FICO scores only consider inquiries from the last 12 months.        

     ·         Length of time since credit report inquiries were made by lenders.      

    ·         Whether you have a good recent credit following past payment problems. 

·         The score ignores all consumer-initiated inquiries made in the 30 days prior to scoring.  Prior to that, auto and mortgage inquiries within any 14-day period count as one inquiry.  (Newest Equifax FICO model, Beacon 5.0, scores any auto and mortgage inquiries within any 45-day period to count as one inquiry. Also, auto and mortgage inquiries are not counted together.)

                Many kinds of inquires aren’t counted at all. 

 o       If you order your own credit report                  

o       Scores used to make you a “pre-approved” credit offer              

o       Current lenders to review your account                

o       Requests from employers

  §         Inquiries don’t affect scores that much.  Large numbers of inquiries also mean greater risk: 

               People with six inquiries or more on their credit reports are eight times more likely to declare

               bankruptcy than people with no inquiries on their reports.

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