Figuring Out the Ever Nebulous Numbers Called Credit Scores

Credit Score Factors

The information contained on our credit reports affect every aspect of our lives; including employment, insurance, and even interest rates (mortgage, credit cards, automobiles, etc.). There is specific information captured on our report which is used to form our credit score:

? Payment History (accounts for approximately 35%)

? Outstanding Debt (accounts for approximately 30%)

? Length of Credit History (accounts for approximately 15%)

? Types of Credit Currently in Use (accounts for approximately 10%)

? Recent Inquiries (accounts for approximately 10%)

Payment History ? Your payment history includes the following types of specific Information:

? Account payment information on specific types of accounts (credit cards, retail accounts, installment loans, finance company accounts, mortgage, etc.)

? Adverse public records (bankruptcy, judgments, suits, liens, wage attachments, etc.), collection items, and/or delinquency (past due items)

? Severity of delinquency. The more recent the problem, the larger the impact on your credit score.

? Amount past due on delinquent accounts or collection items

? Time since and frequency of past due items (delinquency), adverse public records, or collection items

? Number of past due items on file

? Number of accounts paid as agreed

Outstanding Debt ? Your credit score is adversely affected if you owe amounts at or near your credit limit, so if possible, split the balance and transfer some of the debt to a second card. A low balance on two cards is better than a high balance on one. (Credit card companies usually charge a 'transfer' fee, but 'reward' you for switching you debt by offering a low interest rate. Sometimes the interest rate offered is for an introductory period only, so make sure you read the fine print before transferring your debts.)

? Amount owing on accounts

? Amount owing on specific types of accounts

? Lack of a specific type of balance, in some cases number of accounts with balances

? Proportion of credit lines used (proportion of balances to total credit limits on certain types of revolving accounts)

? Proportion of installment loan amounts still owing (proportion of balance to original loan amount on certain types of installment loans)

Length of Credit History ? The longer you have maintained your accounts, the better it reflects on your credit report.

? Time since accounts opened

? Time since accounts opened, by specific type of account

? Time since account activity

Types of Credit in Use ? Loans from finance companies generally lower your credit score. According to FICO, this is heavily relied upon when there is little other credit history upon which to base a score.

? Number (or amount) of different types of accounts (i.e. installment loans, credit cards, retail accounts, mortgage, consumer finance accounts, etc.)

Recent Inquiries on Your Report ? Recent applications for several new accounts may negatively affect your score. If you inquire about special promotions it does not affect your credit report.

Now that we know what factors the credit bureaus consider when calculating your credit scores, you might be saying to yourself... yeah, yeah, I've heard all that before. Tell me something I don't already know, like how I can raise my score!

With that thought in mind, pay your bills on time. If you have recent late payments on your credit report, lenders view this as you larger credit risk. When you get your bills, don't let this sit on your kitchen table collecting dust. Keep a log of your current bills by due date and the total amount due. Having a late payment appear on your credit report today can have a larger impact on your credit score than filing bankruptcy five years ago!

Manage your credit effective, and don't say... "Duh, that one is obvious". I am definitely stating the obvious here. However, one of the most common ways for consumers to get into a downward spiral credit wise is the poor choices we all have made using the unsecured portion of our credit; CREDIT CARDS. Credit cards do offer immediate relief (or often time's instant gratification) to our needs (or wants). Don't go out buying luxury items if you don't have cash readily available to pay for those items when the bill comes due. That means saying "NO" to plasma screen TV's, new furniture, Gucci watches, and all the items that we "simply can't live without".

Anytime you run a balance on an unsecured credit card or line of credit, it has an impact upon your credit score. By focusing on keeping the balance you carry on your credit cards / lines of credit to less than 25% of your total line of credit, you will be in better shape regarding your credit score.

For more information regarding your credit scores, credit reports or debt options currently available to you, please contact Gateway Credit Connection or visit us online at

Michae l Goff is the Co-Founder of Gateway Credit Connection, helping empower consumers to take control of their personal and business finances.

Gateway Credit Connection 15770 Dallas Parkway Suite 1100 Dallas, TX 75248 469.547.4323 Visit us online at

Bad Debt Recovery

Bad Debt IdentificationIdentifying bad debt is not as easy as it sounds. But the earlier... Read More

Convenience Can Be Costly

You've just opened your credit card bill and attached to your statement you find a... Read More

Myths and Truth about Credit Scoring

Credit score is the key factor determining approval of almost any type of credit. It... Read More

Learning the Disturbing Facts about Credit Card Debt

When I received my first credit card in the mail at age 18 I was... Read More

Identity Theft ? Additional Protection for Soldiers on Active Duty

Congress passed the Fair Credit Reporting Act several years ago in an attempt to smooth... Read More

10 Ways of Reducing the Risk of Identity Theft

1- Check your credit report regularly2- Secure personal information in your home, especially if you... Read More

Figuring Out the Ever Nebulous Numbers Called Credit Scores

Credit Score FactorsThe information contained on our credit reports affect every aspect of our lives;... Read More

New Credit Advice: Dont Pay off Those Credit Cards!

Credit needed for real estate mortgage financing differs from credit needed for consumer loans. If... Read More

Five Reasons to Repair Your Credit Score - You Can Do It Yourself

There are multiple reasons that tell us why we should have a 700+ Credit Score,... Read More

Why Americans Find Predatory Lending Offensive

"Menis - the author translates as "indignant rage" - It is the kind of rage... Read More

Understanding the Function of Credit

What is Credit?Credit is the backbone and the engine behind the workings of the economy.... Read More

Is Plastic Making You Happier?

If you're like most people, you probably own at least one.And like most people, you've... Read More

Dont Fall For A Scheme When Trying To Rebuild Your Credit History

For people with a spotty credit history or bad credit, getting approved for a standard... Read More

Commercial Collections And Credit Granting

It is estimated that billions of dollars in delinquent commercial credit is currently being carried... Read More

How To Repair Your Credit Report

A credit report is run on a buyer when he or she needs to buy... Read More

Student Credit Cards 101

Almost all students have and use student credit cards. Some of the students use them... Read More

The Easy Way To Gain Access To Your Free Online Credit Report

When you apply for credit, those lending you the money want to know if you... Read More

How Credit Scoring Works

The all important credit score! It determines the amount of loan you can get, it... Read More

Low Interest Credit Cards: A Thing of the Past?

With interest rates rising, low or zero percent credit cards may soon become a thing... Read More

Reward Credit Cards: Get the Best Rewards Card Incentive Program

A good credit reward card can contribute to your retirement account, offer gas rebates, score... Read More

Credit Scores and Loan Applications

Keep Your Credit History Clean - Remove A Negative Credit Record From Your Credit ReportIt... Read More

Credit Help for Real Estate Financing: Credit Scores

When you buy real estate, lenders run all of the "big three" credit bureau reports.... Read More

10 Step Credit Repair Guide

The process of clearing credit can be laborious and frustrating, but your efforts will be... Read More

What Are the Most Common Ways to Commit Identity Theft or Fraud?

It's the number one source of consumer complaints at the Federal Trade Commission (FTC), and... Read More

How to Dispute Credit Report Errors

Your credit report--a type of consumer report--contains information about where you work and live and... Read More

Balance Transfers Can Help You Stop Putting Money Down The Drain!

As you probably know, interest rates are at all time low right now and if... Read More

Your Consumer Rights

If you have ever fallen behind on your debts you already know that dealing with... Read More

What To Look For In A Credit Card

When you are deciding what type of credit card to get it is important to... Read More

Student Credit Cards 101

If you're a college student, you probably already have a credit card. If not, you... Read More

Collection Agency Secrets for Collecting on Bad Debt

Getting worried that one of your clients, customers or patients will never pay? Have you... Read More

Credit and Its Cost

What is Credit? Credit is money granted by a lender (or creditor) to a debtor... Read More

Credit Card Dirty Tricks

There are many of us that have been badly stung by credit card companies that... Read More

Identity Theft - How to Protect Yourself

"Like the tan? I got tons of sun on that Caribbean cruise. First class tickets... Read More

Credit Counseling Basics

Credit counseling is an option you might want to consider if you are having financial... Read More

Credit Card Entrapment - The Secrets are Out

Have you ever wondered why your credit card bill is so high and you can't... Read More

How Your Credit History Can Affect Your Life

Your credit history is an important aspect of your life. Maintaining your credit rating is... Read More

Practical Suggestions for Protecting Yourself From Identity Theft

It's no surprise that thousands of Americans are victimized by identity theft each year. Last... Read More

Tips for Credit Card Surfers

Moving money from credit card to credit card to take advantage of interest free balance... Read More

What Is a FICO Score and How Do I Make It Work for Me?

Whether or not you receive a loan and what interest rate you get on your... Read More

Why Your Credit Score is Important

Your credit score can either haunt you or reward you. It all depends on how... Read More

Identity Theft Exploding: Here?s How You Can Avoid Becoming A Victim

Americans are more concerned about identity theft than unemployment or corporate fraud, according to a... Read More

Bad Credit? No Credit? Yeah, Its a Problem.

Many companies use the slogan "Bad Credit? No Credit? No Problem!" The truth is that... Read More

Finding and Applying for the Right Credit Card Offer Online

Anywhere you go online nowadays, you will see a multitude of ads for credit cards.... Read More

Everything You Always Wanted To Know About Your Credit Report

Your credit report is a very powerful report that essential controls what you can and... Read More

Useful Tips on Using Credit Cards

Here are some useful tips on using credit cards. Whether you shop online, by telephone... Read More

Credit Reports ? Why Your Credit Score is Important

If you have never heard of a FICO score before, you should become familiar with... Read More

Good Credit Is a Necessity for Everyday Living

Most of us want a good credit report to obtain vehicle financing, credit cards for... Read More

What Is A Credit Report?

Even if you have heard of a credit report, you may not know exactly what... Read More

Legislators Ponder New Credit Protection Laws

Legislators in Washington, D.C. are considering several credit-related consumer protections as outlined in The Fair... Read More

How To Get a Low Interest Credit Card

Consumers often have the first credit card that they ever applied for, never really analizing... Read More