A Beginner's Guide To Credit Scores
By: Mallory MeganWhat is a credit score? A credit score, sometimes referred to as a FICO score is a numerical representation of data that is found in your credit report. FICO credit scores look a lot like SAT scores and range from three hundred, which are rare, to eight hundred and fifty, which are equally rare. These scores are extremely powerful. In the last year only, twenty five billion credit decisions were made based on FICO scores.
These were not only choices about whether you will be approved for a new credit card but additionally how much you could borrow, whether you will qualify for an increase in your credit line, and what sort of interest rate you'll pay. Your credit score determines whether you will qualify to rent an apartment, whether you can get a cell phone, or whether you'll actually get the credit card for which you're "pre-approved." Also, it factors into whether an employer will hire you, whether you will qualify for a cash advance, and what sort of auto insurance premium you will pay.
So that's a pretty powerful three digit number right there. And it realistically is a still life of your borrowing and bill-paying behavior over the previous twenty four months, so as time goes by, you will have the capacity to change it for the better. Thirty five percent of your score is founded upon how well and up to date you stay on your bills.
Thirty percent is based upon how much credit you have available to you and how much of this credit that you are actually using. Ten percent is founded on your search for new credit, how recently you have opened up, or asked about opening new accounts; ten percent is the composition of your file, the percentage of your file that is bankcard debt and installment debt.
Finally, fifteen percent is a measure of the length of your credit relationships, how long you have had the cards. This way you can put the cards you have in priority order and choose older accounts that can improve your credit score first.
Author Resource: Mallory Megan works for Rapid Recovery Solution and writes articles about medical collection agencies