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There are five factors that determine your credit score. Here they are listed with the approximate value they carry in the credit bureau scoring model.

1. Payment History (45%)

This is where bad credit items are taken into account on your credit score. It will help to remove bad credit items.

However even if you have bad credit listed here, if the account is more than 4 years old it will not be weighted as heavily. In addition having positive payment history here will reduce the impact bad credit items have.

2. Available Credit to Debt (30%)

This is how much credit do you have available versus the amount of debt. It will lower your score if you have no available credit.

The bureaus like to see that you have credit that is not being used. This says you are responsible in your use of credit.

3. Length of Credit (5%)

This means how long you have been making purchases using your credit. If you are a new credit user, you can still have a good score.

This factor carries very little weight. Furthermore your use of credit will age naturally, focus your efforts on more important areas of credit repair.

4. Credit Experience (5%)

What are you accounts on credit in? Do you only have credit cards?

The bureaus like your credit file to be diverse. Do not worry about this because it is such a small part of your credit score.

You will naturally have diverse accounts with time. Your will open accounts such as; mortgage, credit card, car loan, boat loan and etcetera.

5. Pursuit of New Credit (15%)

How often is your credit being checked? Are you frequently having your credit run?

If it looks like your credit is being checked continuously it will lower your credit score. The bureaus expect to see credit inquiries but excessive inquires will damage your score.

There are people that try and make purchases with their credit every month. For those their score is going to be lowered because of that.

These weight values are just estimates and not exact. Each bureau varies their scoring model and they choose to keep this information secret from the public. However by building positive payment history and removing negative accounts from your credit report you can increase your credit score dramatically.

Tags: Money

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