What is a credit score anyway?

Credit score

     Your credit score is a 3 digit number ranging from 300-850 that is intended to gauge your credit worthiness. Lenders use this number to decide if they want to approve your loan or application for credit and how much interest and fees you will be charged. Generally, the higher the score the easier it is to get approved and the lower the fees and interest will be.

Your credit score is made up of five major parts:

1. Payment history (35%). Are you paying bills on time? 30 day delinquencies are reported on your report. Some creditors wait till as long as 60 days. This does leave you a small grace period. If you miss a payment but can pay it before 30 days is up, you should be fine.
2. Amounts owed. (30%)The total amount of what is owed by you is being tracked on your report. This is the amount of credit that you are currently using.
3. Length of credit history. (15%) This is how long your accounts are open and time since last used.
4. Types of credit. (10%) The variety of accounts such as installment and revolving.
5. New credit (10%) How you have attempted to acquire new credit and number of inquiries.