Good Credit Report Scores
2010
Understanding Credit Report Scores
Most people realize that they should pull their credit reports and review their scores regularly to make sure their finances are in good order; however, many people do not understand how reporting bureaus calculate the scores used by lenders.
Taking the time to understand credit report scores will help you find out how you can improve your score, so you will be able to obtain loans when you need them. Fortunately, the way your score is calculated is very easy to understand.
Paula de la Torre Editor of the “Best Credit Reporting Services” website — http://www.BestCreditReportServices.com — pointed out;
“… Your payment history comprises the largest part of your score – it accounts for 35 percent of your overall score. Payment history includes information about how many payments you have missed, how far you have gotten behind on your payments, and how quickly you have caught up…”
The weight of late payments depends on the type of loan – a late payment on a revolving loan might not damage your score too badly, but paying your mortgage late can have a dramatic impact on your ability to obtain a loan in the future.
The amount of money you owe makes up 30 percent of your score. Like payment history, this component depends on the type of loan. Owing $15,000 on a revolving loan will damage your score much more than owing $150,000 on a home mortgage.
“… The length of your credit history accounts for 15 percent of your score. People with long, established credit histories fare much better than those who are just becoming financially established. There is little you can do about this, except to maintain a solid track record of using borrowed money wisely…” P. de la Torre added.
The types of credit you carry also factor into your score. Carrying a large number of revolving loans can reduce your score by as much as 10 percent. A home loan, on the other hand, will have less of an impact.
Finally, the number of new loans you have taken out comprises 10 percent of your score. If you have accepted several new loans recently, your score will suffer until you establish a solid payment history.
Further information about how to get a detailed credit report including scores and as often as you want by visiting; http://www.BestCreditReportServices.com
About the Author
Hector Milla runs his corporate website at http://www.OpsRegs.com where you can see all his articles and press releases.
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