How much you pay for insurance, car, rent and mortgage payments, utilities, and even whether you get a job or not, are ALL based on your credit score.
As important as your credit score is, do you really know how it works? Well the good news is you are about to learn the simple secrets behind your credit scores in this quick article…
Payment History- 35%
Your payment history is the largest aspect of your credit score accounting for 35%.
This aspect of your total score calculation is based on your prior payment history with your creditors. Late payments, defaulted accounts, and all other NEGATIVE information on your credit report have the greatest effect.
The more paid-as-agreed accounts you have and the less negative accounts, the higher the credit score.
Percentage of High-Credit Used- 30%
The second largest factor in your credit scores is the amount you owe on your individual accounts in relation to your high credit limits on those accounts. This accounts for 30% of your total score.
You will be scored higher if you owe 30% or less of the high credit limit.