Your credit score is one of the most critical factors in your financial life. It determines if you will be approved for a loan or line of credit. A credit score is a mathematically calculated number developed by the Fair Isaac Corporation (FICO) that lenders use to rate potential customers in determining the likelihood that a customer will pay his or her bills on time.
A credit score or credit rating is determined by using five main criteria as defined by http://MyFico.com:
* your payment history, which accounts for 35% of your credit score
* the amounts owed, which accounts for 30% of your credit score
* the length of your credit history, which accounts for 15% of your credit score
* new credit, which accounts for 10% of your credit score
* the types of credit used, which accounts for 10% of your credit score.
Payment history shows the history of how you paid your bills either on time or late, but unfortunately does not show if your bills were paid before the due date. Amounts owed shows the total amount of credit you have available. If your balance is near the credit limit, this may lower your credit score. The length of...
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