ScoreSense puts the power of financial knowledge into the hands of its members, giving them the ability to keep their finances and families safe. However, even if you’re an ScoreSense member, confident in the security of your financial information, you may still have questions about credit scores, and what all the different terminology means. Here at ScoreSense, some of the questions we hear most often involve how credit scores are calculated, and what the term “score factors” means.
First, you should know that your credit scores are fluid, and can change from month to month. They are based on the information in your credit report, and not all bureaus calculate the score exactly the same way, which is why OTL ScoreSense pulls information from all three major credit bureaus for ScoreSense members. Regardless of the method of calculation, credit scores are all affected by the following factors:
- Payment History – This includes late payments, delinquency, bankruptcies, and anything else that was not paid on time. The more recent the problem, the higher impact it has on your credit score.
- Current Debt – Lenders consider your debt-to-credit line ratio, and if it is too high, it will lower your score. Keep your credit card balances low, and that will make your credit score higher.
- Length of Credit History – The longer you’ve had your accounts, the better your score. This is because your history of paying debts indicates your credit worthiness.
- New Credit – Having too many lines of credit can bring down your credit score. Lenders will see several open lines of credit as a risk, because you can easily increase your debt and get in over your head with payments.
- Types of Credit – The best thing for your credit score is to have a healthy mix of types of accounts. Have a variety of credit cards, retail accounts, installment loans, mortgages, and consumer finance accounts, but make sure they are all paid in a timely fashion.
ScoreSense believes that an informed consumer is a protected consumer, and that’s why at ScoreSense, credit information is readily available to members. By taking control of your credit, you can easily protect your money and your family from threats like identity theft and misinformation. ScoreSense puts your pertinent financial information into your hands, and offers valuable credit information, so that you can be confident that you are handling your finances responsibly. For more information on credit score tips or to get your free credit score today, visit our website!