1. Henderson County 4-H Loren Stanford, Extension Agent 11
Credit Score What is it???
Henderson County 4-H
Loren Stanford, Extension Agent 11
How do you know if you have a credit report?? If you have a credit card or loans….you have a credit report!!

2. Need to know What is a credit score? What influences credit?
When is your credit score important?
Need to know

3. What is a credit score??
A credit score predicts how LIKELY you are to pay back a loan on time. A scoring model uses information from your credit report to create a credit score.

4. How is it calculated?? Here is an example –
What is a credit score??
How is it calculated??
Here is an example –
Your payment history generally makes up 40%
Credit Utilization is 20%
Length of your credit history is 21%
Total amount recently reported balances 11%
New credit accounts is 5%
Available credit is 3%
Credit utilization is also known as credit utilization ratio. It is the amount of revolving credit you are currently using divided by the total amount of revolving credit your have available. Other words – it’s how much you currently owe divided by your credit limit.
For example – you have a total of $10,000 in credit available on 2 credit cards and a balance of $5,000 on one, then your credit utilization rate id 50%.
Below 30% is a good utilization score

5. What is Credit utilization??
Credit utilization is also known as credit utilization ratio. It is the amount of revolving credit you are currently using divided by the total amount of revolving credit your have available. Other words – it’s how much you currently owe divided by your credit limit.
For example – you have a total of $10,000 in credit available on 2 credit cards and a balance of $5,000 on one, then your credit utilization rate id 50%.

6. What influences your credit score??
Some factors that make up a typical credit score includes:
Your bill-paying history
Your current unpaid debt
The # & type of loan accounts you have
How long you have had your loan accounts open
Your payment history is the most important aspect. How you have managed your finances influences your credit. This does include any late payments.
Your credit history is important too. It demonstrates how long you’ve been managing your accounts, when your last payments were made and any recent charges.

7. What influences your credit score??
Some factors that make up a typical credit score includes (continue)
How much of your available credit you are using
New applications for credit
Whether you have a a debt sent to collections, a foreclosure or a bankruptcy and how long ago

8. What does not influences your credit score??
These personal details do NOT affect your credit score:
Age
Marital Status
Religion
Ethnicity
Employer
Salary
Occupation

9. What is your credit score important?
Taking out loans for a house or car
Applying for college
Applying for credit card

10. Need to know I looked up my credit score but it was different. Why?
What is a good credit score
Questions?
Need to know

11. You may have many different scores
This is NORMAL
Scores are calculated at different times and in different ways

12. Why does my score differ?
Scoring Models
Companies have created multiple versions of their scoring models and update them frequently:
FICO
Vantage Score
Other custom models
Credit Report Data
A score uses data from a credit reporting company, and each may have slightly different data:
Equifax
Experian
TransUnion
Others
Why does my score differ?
Timing
Your scores are not calculated on a fixed schedule, so they depend on:
When data is updated at a reporting company
When your score is actually calculated

13. Scores can range from 350-850 The higher the better.
What Is a good score?
Scores can range from
The higher the better.

15. Credit Score Rating % of People Impact
Very Poor
17%
Credit applicants may be required to pay a fee or deposit, and applicants with this rating may not be approved for credit at all.
Fair
20.2%
Applicants with scores in this range are considered to be subprime borrowers.
Good
21.5%
Only 8% of applicants in this score range are likely to become seriously delinquent in the future.
Very Good
18.2%
Applicants with scores here are likely to receive better than average rates from lenders.
Exceptional
19.9%
Applicants with scores in this range are at the top of the list for the best rates from lenders.

16. How to maintain a healthy score
Typically 6 months’ worth of activity will provide enough information to generate a score.
Your score will increase or decrease based on how you pay your bills.
Scores don’t change over night

17. Thank you
Any questions?