There are certain factors that determine your credit score. These factors include; payment history, debt level, length of credit history, etc. These factors also determine how a lender sees you.

What Is a Credit Score?

A credit score is a three-digit number that is used by lenders to predict the likelihood of paying your credit obligations to time. Credit score generally ranges from 300-850 and is calculated using your credit history information from your credit report.Your Credit Score

How Is Your Credit Score Used?

After you make a credit card application, the creditor or lender makes use of your credit score to quickly make a credit/no-credit decision.

Creditors and lenders can also use your credit score to set the pricing for your credit card or loan. If you have a higher credit score, it can help you qualify for lower interest rates on credit cards and loans while lower credit scores result in higher interest rates.

How Many Credit Scores Do You Have?

The most commonly used versions of credit score are the FICO score, developed by FICO, previously Fair Isaac Company. The FICO score is being used by many creditors and lenders to decide if or not credit should be extended to you.

How To Check Your Credit Score

Your credit score can be checked for free from services like, Credit,, and Also, some banks, credit unions, as well as credit card issuers make your credit score available either on your billing statement or online,also some sites may ask for a trial subscription or ask for your credit card information. This means you may be charged in a few days if you don’t take some actions to stop the trial. You can purchase as well your full credit report from any of the major credit bureaus like Equifax, Experian, and TransUnion.

What Makes Up A Credit Score?

Different pieces of your credit history are given different weights in calculating your credit score. This is because some parts of your bill-paying history are more important than others. They are;

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Payment History – 35%

Whether or not you pay your bills on time is very important for lenders. A pointer to this is how you’ve paid your bills in the past. Late payments, collections, and bankruptcies all have a way of affecting the payment history of your credit score.

Debt Level – 30%

The higher your credit utilization, the closer you are to your limits, the lower your credit score will be. Credit utilization is the amount of debt you have in comparison to your credit limits. It is ideal to keep your credit card balance at about 30% of your credit limit or less.

Length of Credit History – 15%

A longer credit history pays off because it gives more details about your spending habits, which is why we advise that you leave open the accounts you’ve had for a long time.

Inquiries – 10%

An inquiry is added to your credit report each time you apply for credit. Be careful not to make too many applications for credit, as this may mean that you are taking on a lot of debt or that you are in some kind of financial trouble. Your credit score calculation only considers inquiries made within a year.

Mix Of Credit – 10%

It is good to have different kinds of account as it shows that you have experience managing a mix of credit. This is an important factor in your credit score except you don’t have much other information on which to base your score. Although it is best to open new accounts because you need them and not necessarily because you want to have a better mix of credit.

Take note of the habits that would negatively affect your credit score if you desire your credit score to stay on the bright side.