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Understanding Credit Reports


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How Are Credit Scores Calculated?  How Are Credit Scores Calculated

Payment History - 35%

The timely manner in which a consumer did or did not repay the debt. This includes all types of credit accounts, late or missed payments, and public records and collection items. 

Outstanding Debt- 30%

The total dollar amount of debt currently owed. For credit cards, this means the total amount owed across all accounts in relation to the total credit limit. When a high percentage of the credit limit is already used, this can indicate overextension and a greater likelihood of future missed payments. Keeping credit card balances well below the limits can help this part of the score. 

Length of Credit History - 15%

The amount of time the consumer has held credit accounts. This includes how long ago your accounts were established. A longer history helps your credit score. 

Pursuit of New Credit - 10%

Opening many new accounts in a short period may hurt a credit score. 

Types of Credit in Use - 10%

Analysis of the types of credit a person has in use comparing installment loans, credit cards, retail accounts, mortgage loans, charge cards, etc.

Information NOT Calculated in a FICO Credit Score

  • Race, color, religion, national origin
  • Sex, marital status
  • Age
  • Salary, occupation, title, employer, employment history
  • Where you live
  • Overall wealth (assets an individual may have) 

A person’s credit score is not the only variable that may be considered by a lender when applying for a loan. Although not included in the credit score, some of the variables noted here may still be considered when a lender reviews a loan application.


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