What Makes Up Credit Scores?

What makes up credit scores?

Credit scores are calculated using information found on your credit reports, including your history of repaying debts on time, how long you’ve had a loan or line of credit and the total amount of debt that you owe. The most widely used credit scores by lenders are FICO® scores. Most credit scores fall between 300 and 850. A higher score generally makes it easier to get approved for a loan or credit card and secure lower interest rates.

What information is on a credit report?

A typical credit report usually will include your name, address and date of birth, along with the following information about your credit history:

• Your accounts — This includes both open and closed accounts such as credit cards, mortgages and other types of loans such as auto, personal or student loans. It also includes the length of time you’ve had each account open.
• Payment history — Creditors and lenders typically report to the credit bureaus whether you’ve paid your bills on time. Late payments and accounts in collections are reported. And if you’ve filed for bankruptcy, that could show up too.
• Available credit — Your reports will also show how much credit you’re currently using. If your credit cards are maxed out, this could affect your overall credit scores.
• New credit applications — Any time you apply for credit, this will show up as a hard inquiry on your credit reports.

What doesn’t show up on a credit report?

Like income, there are some other factors that won’t appear on your credit reports. These include your race, gender, marital status, nationality and whether you’re receiving any kind of public assistance.You also probably won’t see any of your bank transactions listed or certain types of bills, including rent, mobile phone or cable TV. Source