What is a Credit Score?

A credit score is a number generated by a mathematical formula that is meant to predict credit-worthiness. The most common of the credit score standards is the FICO score created by Fair Isaac. The FICO score ranges from 300-850 and is intended as a predictor of whether or not you will be 90 days late on a loan obligation. Fair Isaac uses thousands of credit reports to calibrate the FICO scoring model and is very secretive of the exact formula.

Payment History:

• payment information on specific types of accounts
• adverse public records such as bankruptcy, judgments and liens
• severity of delinquency (how long your account has been past due)
• amount past due on delinquent accounts or collections
• number of past due items
• number of accounts paid as agreed

Amounts Owed:

• amounts owed on accounts
• amounts owed on specific types of accounts
• number of accounts with balances
• balance of credit lines used compared to limits

Length of Credit History:

• how long accounts have been opened
  
• when was the last activity
  
  

New Credit:

• number of recently opened accounts
• number of recent credit inquiries
• time since credit inquiry(s)

• number of various types of accounts such as credit cards, retail accounts, installment loans, mortgages, consumer finance accounts, etc.