Who Influences Your Credit Scores - CREDIT SCORE

CREDIT SCORE: Who influences your credit scores

The simple answer is “You do.” The detailed answer, however, is much more complex. It's important to realize that your credit scores are in constant flux, changing each time information changes, is added to or deleted from your credit reports. Making a mortgage payment, applying for a department store credit card and opening a new line of credit will all trigger changes in your credit report and, as such, a change in your credit score. A late payment or the closure of a credit card account will also have an immediate impact to your credit score.

The following categories drive your FICO credit score:

• Your payment performance history (35%)
• Your current level of indebtedness (30%)
• The age of your credit history (15%)
• Your pursuit of new credit (10%)
• The type of accounts in your credit report (10%)

As you can see, payment performance and level of debt account for 65% of the points in your FICO score. The remaining categories are worth fewer points but are still very important especially for those who are aiming to earn the highest scores.

Be aware that under the Equal Credit Opportunity Act, credit scoring may not factor in gender, martial status, national origin, race, or religion. And note that while credit scores are important, they're just a measurement of your credit worthiness. Lenders will also consider your income or “capacity” as well as other factors when considering your application. For example, insurance companies will typically consider previous insurance claims when evaluating an applicant.