Understanding Your Credit Score

The higher your credit score, the better. A high score indicates lower perceived risk to lenders. Your score is developed using credit data that is grouped into five categories.

• 35% Payment History: Pay your debts on time. This is the single most important factor of your credit score.
• 30% Amount Owed: Avoid using more than 30% of your available credit; this may signal to creditors that you are at a higher risk for defaulting.
• 15% Length Of Credit History: In general, a longer credit history will increase your score.
• 10% Credit Mix: It's beneficial to have different types of credit (credit cards, installment loans, auto loans, mortgage loans etc.).
• 10% New Credit: Avoid opening several credit accounts in a short period of time; this can represent a greater risk to the lender (especially for those without a long credit history).