| What is my credit score is an important question to | | | | 1. Payment history |
| get answered for financial reasons. To know What is | | | | Payment history says about your past financial |
| my credit score you will have to first understand What | | | | obligations and how quickly you met them. Problems |
| is a credit score. The credit score which is also known | | | | such as bankruptcy will reduce your credit score. If |
| as FICO score is a concept created by Fair Isaac | | | | you paid your credits promptly you will get a higher |
| Corporation. Fico score is proprietary of Fair Isaac | | | | credit score. |
| Corporation and hence the formula used to calculate | | | | 2. Current debt |
| the Fico score is under the wraps. | | | | How much you owe contributes to your credit score. |
| Credit score is a three digit number which defines an | | | | This factor considers the present financial position. If |
| individual's credit worthiness. Higher the credit score | | | | you are in debt with a large number of sources then |
| better is an individual's credit worthiness and hence | | | | obviously it is going to pull down your credit score |
| lower is the risk of lending to the individual. | | | | significantly. |
| From Bankers to employers many use credit score as | | | | 3. Duration of Credit History |
| a base to determine the financial risk. Hence it is very | | | | If you are having a good credit history over a long |
| important to know how much is the credit score and | | | | period of time, then you will land with a good credit |
| try to improve the credit score as much as possible, | | | | score. It is similar to someone with longer work |
| though not everyone lends based on credit score. | | | | experience is preferred over someone with lesser |
| Good credit score ranges anywhere from 825 to 650. | | | | work experience. Having a good credit history over |
| Low credit score is from 575 to 650. Anything below | | | | longer time period is important. |
| 575 is considered as Bad credit score. For someone | | | | 4. Number of Credit |
| with a good credit score the rate of interest will be | | | | If a person has more number of credit cards, then it |
| lesser as the risk associated is lesser compared with | | | | gives a negative impression about the person's finance |
| someone with a bad credit score. | | | | and so it will lower the person's credit score. Someone |
| Credit scores are determined based on the following | | | | with lesser credit sources will be given a higher credit |
| factors. | | | | score. |