WHAT IS A CREDIT SCORE ?
A credit score is a number that reflects your credit risk level , typically with a higher number indicating lower risk . Your credit score is a fluid number , and it changes as the elements in your credit report change . For example , payment updates or a new account could cause your score to fluctuate .
FICO ® scores are your credit rating . Scores can range from 300-850 , higher is better . Your FICO ® score is calculated based on your rating in five general categories :
• Payment history
• Length of credit history
• Types of credit used
• Amount owed
• New credit
WHAT IMPACTS MY CREDIT SCORE ?
Generally , credit scores are affected by elements in your credit report , such as :
• Number and severity of late payments
• Type , number and age of accounts
• Total debt
• Recent inquiries
HOW DO I IMPROVE MY CREDIT SCORE ?
• Paying your bills on time is the single most important contributor to a good credit score . Even if the debt you owe is a small amount , it is crucial that you make payments on time .
• Minimize outstanding debt , avoid overextending yourself and applying for credit needlessly .
• Use the credit you already have to prove your ongoing ability to manage credit responsibly . Applications for new credit show up as inquiries on your credit report , indicating to lenders that you may be taking on new debt .
• If you have negative information on your credit report , such as late payments , a bankruptcy public record item or too many inquiries , your best strategy is to pay your bills and wait . Time is often your best ally in improving credit .