What Factors Affect Your Credit Score?

Consider your credit score a letter grade based solely on one report – your credit report. There are three national credit bureaus – Equifax, Experian and TransUnion. Because each of the three credit bureaus act independently of one another, your three scores can vary between bureaus.

While there are many factors contributing to your credit score, the three biggest are:

Payment History 1. Do you make on-time payments? 2. Have you missed a payment?

Amount of Debt Owed 1. Of your available credit limit, how much of the limit is being used?

Length of Credit History 1. How long have your credit accounts been established? Typically, the longer the history the higher the score.

Your credit score can range between 300 – 850. A “good” score is considered anything above 660 and a “bad” score is anything lower than 560.

This letter grade (score) affects many financial decisions most people make throughout their lives. Your score will determine if a lender will approve you for a mortgage or car loan, what amount they’ll lend you, and at what interest rate. Want to lease an apartment? The landlord will check your credit score to help them decide if they’ll rent to you. Most employers will check your credit score and use it in their decision-making process.

There is no shortage of reasons to know and protect your credit score. Begin improving your score by checking your three free credit reports at www.annualcreditreport.com and make sure all of the information within each report is accurate. If necessary, fix any inaccuracies and implement changes to improve your score!

-       Written by Elizabeth Braden, Worley Erhart-Graves Financial Advisors