Global Credit Solutions
(818) 919-3500
How Scoring Works
With so much emphasis on your credit score, it is important to understand how the score is calculated. Commonly referred to as your FICO (Fair Issac CO) Score, your credit score is a summation of complex algorithms used to determine your exact score. While the formulas are protected, we are given approximate percentages taht help us understand what goes into your score.35 % PAYMENT HISTORY
The largest factor is your basic payment history. This is the number of unpaid bills that you have, any bills sent to collection, bankruptcies and so forth. The items that are most recent have the most impact.
30% OUTSTANDING DEBT
Are your credit cards maxed out? High balances, or balances close to your credit limit can negatively affect your score. Keep balances below 35% of your credit limit.
15% LENGTH OF CREDIT HISTORY
How long have your accounts been open? The longer an account has been open, the better.
10% RECENT INQUIRIES
Every time you apply for credit of any kind, you create an inquiry on your credit report. Multiple inquiries negatively affect your score.
10% NEW CREDIT
The number of recently opened accounts and the proportion to your total number of accounts.
The Credit Bureaus
Three major bureaus dominate the market for supplying credit scores. When you apply for credit, each bureau has its own version with its own name:
*Equifax is called Beacon
*TransUnion is called Empirica
*Experian is called Experian/Fair Issac