Your Guide To Your Credit Report

Your Guide To Your Credit Report

Your Guide To Your Credit Report

Understanding Your Payment History And Amount Of Debt

Your credit score may seem like some space age number that overly complicated scientific calculations are run to come up with, but it is, in fact, composed of just a few categories over which you have complete control. To help you maximize your credit score, we will focus on two factors that account for 65 percent of your score.

Payment History

It is no surprise that if you do not pay your bills lenders are going to see you as a greater risk. How do they know if you pay on time or in the agreed upon amount, though? Put simply, your other lenders will tell on you. They will share your payment history with credit reporting agencies, which compile that information so they can have a comprehensive idea of whether or not you have been reliable in your payments. This portion of your credit history accounts for 35 percent of your credit score.

Amount Of Debt

If you are already carrying a large amount of debt, taking out another loan is going to be difficult for you. Lenders, however, do not care exclusively about the lump sum of your debt but will focus more on the amount of revolving debt you carry, or the amount of debt you push off paying until next month on your credit cards, etc. The amount of debt you carry accounts for 30 percent of your credit score, so minimize the sum of your revolving debt to improve your score.

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