How is your credit score calculated?

calculate credit score
Your credit score can even affect how much you pay, since lenders use your credit score,

November 19th – Hispanic Solutions Group

There is a small three-digit number that has a big impact on whether you can buy a new car, a house, or even a new cell phone – your credit score. Your credit score can even affect how much you pay, since lenders use your credit score to determine your interest rate, as well as your eligibility for credit.

When you’re working to improve your credit, it can seem like it takes forever for credit scores to go up. Several factors affect how quickly your credit score will grow to the “good” or “excellent” ranges, but you should expect slow and steady improvements rather than overnight miracles.

Low or no credit can make it difficult to qualify for new lines of credit or even get approved for an apartment on your own. But there are steps you can take to improve your credit, whether you’re starting from scratch or overcoming mistakes from the past. Here’s what you need to know about the best ways to improve credit quickly and how long they can take to work.

How is your credit score calculated?

There are several scoring models, and they all use data from your credit report to determine your score. The data is divided into five categories. For FICO scores, the most widely used scoring model, some categories have a greater impact on your credit score than others:

  • Payment history:Your payment history is the most influential factor, affecting 35% of your score. It shows creditors if you have paid past credit accounts on time or if you have a history of late or missed payments. Credit Utilization: Credit utilization represents 30% of your score. It reflects the amount of available credit you use and is calculated by dividing your total debts by your total available credit.
  • Length of credit history: Lenders want to see that you have successfully managed credit for several years, so the length of your credit history determines 15% of your score.
  • Credit combination:your combination of credits, or the variety of credits available to you, affects 10% of your score. Lenders like to see that applicants can handle various types of credit, such as credit cards, home loans, and personal loans.
  • New credit:When you apply for multiple new credit accounts in a short time, lenders worry that you will overdo it. Your new credit impacts 10% of your score.

If you have any questions related to finances, credits and other related topics, but do not know who to turn to, contact us by going to Hispanic Solutions Group, writing to info@hispanicsolutionsgroup.com, by calling 612-216-1599 or accessing financial information on YouTube, The credit channel, Our specialists in charge of Mrs. Jessica Aliaga will be informing you of any concerns about this and other financial matters of general interest and guidance as in this topic, today we bring you the following report so that you can make your most important economic decisions , also him We invite you to follow our social networks: LinkendIn, Facebook, Twitter and Instagram.