Who Determines your Score? Three Credit Bureaus:

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Presentation transcript:

Who Determines your Score? Three Credit Bureaus:

Your Credit Score Decides: How to Improve Your Credit Score Your Credit Score Decides: Whether you’ll be approved for credit for mortgages, car loans, and credit cards What interest rate you’ll get on those loans The cost of homeowners and car insurance

What makes up a Credit Report? Includes: Financial activities/ Balances on all accounts Credit card accounts Loans Payment history Legal action against you. E.g. Bankruptcy (not being able to pay off a debt).

What makes up my Credit Score?

Types of Credit in Use Considers the number of credit accounts and the mix of credit types: credit cards, installment loans (such as cell phone payment plans), mortgages

Payment History Record of past payments on mortgages, credit cards, car loans, other installment loans such as furniture or cell phones information from public records, such as bankruptcies and lawsuits Details of any missed or late payments, such as the amount, how long ago it occurred, and how late it was.

Amounts Owed total $$$ owed for all accounts the mix of types of $$$ owed (credit cards & car loans not the same) total # of accounts with balances % of total available credit being used (the closer you are to maxing out your available credit, the more negative the impact on your score)

Length of Credit History More years of credit = higher credit score

New Credit When banks inquire for your credit score this can have a negative effect on score in short-run Try to limit applications for new credit