| Generating capital for your business is highly | | | | · Time since accounts opened |
| dependent on your personal credit score. Your | | | | · Time since accounts opened, by specific type |
| Payment History makes up 35% of your entire | | | | of account |
| personal credit score. The other key indicators that | | | | · Time since account activity |
| make up your credit score are Length of Credit | | | | The average consumer's oldest obligation is 13 years |
| History, New Credit, Types of Credit Used, and | | | | old, indicating that he or she has been managing credit |
| Amounts Owed. The percentage breakdown of each | | | | for some time. In fact, we found that 1 out of 5 |
| in relationship to your personal credit score is as | | | | consumers who recently applied for credit, had credit |
| follows: | | | | histories of 20 years or longer. Only 1 in 20 consumers |
| Payment History 35% | | | | had credit histories shorter than 2 years. |
| Amounts Owed 30% | | | | New Credit that makes up 10% of your score is |
| Length of Credit History 15% | | | | determined by: |
| New Credit 10% | | | | · Number of recently opened accounts, and |
| Types of Credit 10% | | | | proportion of accounts that are recently opened, by |
| Each of these areas has specific items associated | | | | type of account |
| with it to determine that percentage of your personal | | | | · Number of recent credit inquiries |
| credit score. The 30% of your score associated with | | | | · Time since recent account opening(s), by |
| Amounts Owed is made up of: | | | | type of account |
| Amounts Owed | | | | · Time since credit inquiry(s) |
| · Amount owing on accounts | | | | · Re-establishment of positive credit history |
| · Amount owing on specific types of accounts | | | | following past payment problems |
| · Lack of a specific type of balance, in some | | | | An important indicator of new credit is inquiries. The |
| cases | | | | number of times someone pulls your personal credit |
| · Number of accounts with balances | | | | report. When someone applies for a loan or a new |
| · Proportion of credit lines used (proportion of | | | | credit card account - in short, any time one applies for |
| balances to total credit limits on certain types of | | | | credit and a lender requests a copy of the credit |
| revolving accounts) | | | | report - this request is noted as an "inquiry" in the |
| · Proportion of installment loan amounts still | | | | applicant's credit file. The average consumer has had |
| owing (proportion of balance to original loan amount on | | | | only one inquiry on his or her accounts within the past |
| certain types of installment loans) | | | | year. Fewer than 7% had four or more inquiries |
| The formulas that create your score look at the | | | | resulting from a search for new credit. |
| averages of consumers and compare you to those. | | | | Types of Credit Used makes up 10% of your score |
| For example with the Amounts Owed section the | | | | and is: |
| typical consumer has access to $12,190 on all credit | | | | · Number of (presence, prevalence, and recent |
| cards combined. More then half of all people with | | | | information on) various types of accounts (credit cards, |
| credit cards are using less than 30% of their total | | | | retail accounts, installment loans, mortgage, consumer |
| credit card limit. Just over 1 in 8 are using 80% of more | | | | finance accounts, etc.) |
| of their credit card limit. About 48% of credit card | | | | An average consumer has a total of 11 credit |
| holders carry a balance of less than $1,000. About 10% | | | | obligations on record at a credit bureau. These include |
| are far less conservative in their use of credit cards | | | | credit cards (such as department store charge cards, |
| and have total card balances in excess of $10,000. | | | | gas cards, or bank cards) and installment loans (auto |
| When we look at the total of all credit obligations | | | | loans, mortgage loans, student loans, etc.). Not included |
| combined (except mortgage loans), 54% of | | | | are savings and checking accounts (typically not |
| consumers carry less than $5,000 of debt. This | | | | reported to a credit bureau). Of these 11 credit |
| includes all credit cards, lines of credit, and | | | | obligations, 7 are likely to be credit cards and 4 are |
| loans-everything but mortgages. Nearly 30% carry | | | | likely to be installment loans. |
| more than $10,000 of non-mortgage-related debt as | | | | Depending on what side of the averages you fall on |
| reported to the credit bureaus. | | | | your score will be higher or lower. Obviously if the |
| Based on your current situation you can see how your | | | | average consumer has 11 credit obligations and you |
| score may be higher or lower compared to the | | | | have 50, you are likely to have a lower score then |
| average statistics of the general consumer. | | | | someone with 13 with everything else being the same |
| Length of Credit History that makes up 15% of your | | | | on your credit files. |
| score is determined by: | | | | |