Jan 092011

To extend credit, lenders use your credit score to determine if you are a reliable candidate. Lenders can also use your credit score to set the interest rate that you will pay to borrow money.


The formula is a statistical translation of the credit history from your credit report and public records. A credit score is a three-digit score from 300 to 900.

The higher scores reflect the probability that you will not become delinquent with your credit payments.


The credit score is an important indicator of your creditworthiness. Many high volume lenders grant credit based solely on your credit score.


Your credit report is updated on an ongoing basis, your credit score is recalculated continuously.

Here are a few pivotal points on what credit scores are based on:

Payment history – Indicates whether you have made your credit card payments, loan payments and other payments on time

  • Amounts owed – Compares how much you owe to your credit limits with various lenders
  • Length of time on file – Indicates how long you have had credit accounts
  • New credit – Shows how often you are looking for new credit and how you handle accounts you have recently opened
  • Type of credit – Considers the type of loans you have – car loans, lines of credit, credit card limits

Here are a few pivotal points on how to keep your credit score high

  • Pay all of your bills on time, at least the minimum payment.
  • Do not let your account go to a collection agency.
  • Do not run your balances up to your credit limit.
  • Keep your account balances below 75% of your available credit.

Want to learn more – see: Credit Scores – How Do The Numbers Add-up

This site uses Akismet to reduce spam. Learn how your comment data is processed.