| There are many methods which can be used to | | | | limit? Were there instances that you've even |
| calculate your credit score but the most | | | | exceeded your credit limit? If so, then |
| common method is the FICO and it is used by | | | | you'll likely get a low score on your credit |
| most lending companies. | | | | utilization. Hence, borrowers are advised to |
| In the simplest terms your credit score | | | | keep spending below their credit limit. As |
| is your credit history calculated in figures. | | | | much as possible, keep your balances at least |
| There are many methods which can be used to | | | | 50% lower or even less of your credit |
| calculate your credit score but the most | | | | limit15% goes to the length of your credit |
| common method is the FICO. FICO was developed | | | | history. How long has it been since you |
| by the Fair Isaac Company and is the | | | | started your credit report? The longer your |
| preferred method used by most lending | | | | length of credit history is, the better your |
| companies. Your credit score determines | | | | score will be. This is because, the more |
| whether a lender will approve your | | | | information your creditors can get out of |
| application or not or whether a lender will | | | | your credit report, the better they can gauge |
| give you less rates on your payments or | | | | you as a borrower. This is why it is very |
| not.Credit scores or FICO scores generally | | | | important to establish a good credit report |
| range form a low of 340 to a high of 850. | | | | as early as you possibly can. Also, this is |
| Ideally, you should aim for a score of at | | | | the reason why you should always think twice |
| least 700 or more. If you get a score of 600 | | | | before closing accounts that you've had for a |
| and below, creditors will likely consider you | | | | long time.10% of your credit score is based |
| as a high risk borrower.Knowing how your | | | | on inquiries. If you're in the habit of |
| credit score or your FICO score is calculated | | | | submitting credit card applications just for |
| will help you become more aware of your | | | | the heck of it, your credit score can be |
| spending and your payment habits. Let's | | | | affected. Also, whenever a creditor denies |
| consider the break-down of categories used to | | | | your application, it can also have an impact |
| sum up your credit score.What comprises your | | | | on your FICO score. Thus, before submitting |
| credit score?35% of your credit score depends | | | | any application, see to it that you really |
| on how good of a payer you are. If you make | | | | intend to get an approval out of it.The other |
| it a point to pay all your bills promptly, | | | | 10% of your credit score is based on mix of |
| you should have no problem obtaining the | | | | credit. If you have a credit card account, a |
| complete 35% of your credit score. However, | | | | car loan, a mortgage loan and various types |
| if you're in the habit of delaying or | | | | of insurance policies, it will show your |
| skipping payments, or if you defaulted on | | | | flexibility and dependability as a creditor. |
| some of your debts, your credit score will | | | | If you've been able to manage all these |
| also be affected.30% of your credit score is | | | | different types of accounts without any |
| calculated based on the level of your debts. | | | | problems on your payments, then you'll likely |
| Do you always maximize the use of your credit | | | | get a perfect score on this category. |