If you’ve ever tried to apply for a car loan, a mortgage, or credit card, you already understand the importance of the information on your credit report. Any blemishes, such as missed payments or accounts in collections, can negatively impact your credit score and may make it more difficult for you to obtain new credit.
Because your credit report is such an important part of your financial life, it’s important to understand how it works and how your actions can positively or negatively impact your score.
How is my credit score determined?
Each credit reporting agency (CRA) has its own model for evaluating your information and assigning you a credit score, so your scores will vary from CRA to CRA. Also, you should know that your scores are updated each time there is a request for a score, and new information received impacts the model. In general the five following factors are considered:
1. Payment history. Your payment history accounts for approximately 35 percent...
Your credit score is an important part of your financial life, so it’s important to understand how it works. Test your credit score knowledge with our Money Matters quiz, and be entered to win up to $1,000.
Under certain circumstances, such as a job loss or illness, late payments may be unavoidable. Since payment history is weighted heavily when calculating your credit score, it’s important to understand the impact that these late payments may have.
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