What is a Credit Score

A credit score is a numerical expression based on a statistical analysis of a person's credit files, to represent the creditworthiness of that person. A credit score is primarily based on credit report information typically sourced from credit bureaus.

Good Credit scores are becoming a necessity in today's way of life. Weather you are a lender or a buyer creditors will base their decision on some type of credit score. The credit score also determines the interest.

What is a good Credit Score

Credit scores range anywhere from about 300 to 850. The higher your credit score the better. Below is a table of apprx ranking. Your average American will most likely have a score around 680.

What makes up your credit score

Generally, there are five factors that influence your credit score. The biggest factor is payment history. Payment history accounts for 35% of the score. Second, is the amount of money the borrower owes the lenders. Amount owed accounts for 30% of the score. Third, is the length of credit history. Length of credit history accounts for 15% of the score. Fourth, new credit obtained within the last 12 months. New credit accounts for 10% of your score. Lastly, the remaining 10% is the types of credit used; bank credit card, Installment loans, mortgages, department store credit cards, etc.