Credit Score Rating Factors

The Anatomy of a Credit Score How Credit Scores are Determined BadCreditChannel.com

Understanding Credit Scoring
CREDIT REPORT FACTORS
A. Credit History
B. Delinquent Accounts
C. Credit Card Accounts
D. Public records, foreclosures, & Collection
E. Inquiries

Understanding Credit Scoring
Credit History shows how well debt has been paid over time
Older account has greatest impact
New accounts aren’t higher risk so long as paid on time
Can substitute non-traditional credit

Factors Into Credit Score
Major derogatory items
Time at present job
Occupation
Time at present address
Ratio of balances to available credit lines
Number of credit lines on report
Number of years one had credit in the credit bureau database

Years at Current Address
Years at Current Address
The longer you stay in one place better you will score
Points Added/Subtracted
<.5 year 12
.5 – 2.49 Yrs 10
2.5 – 6.49 Yrs 15
6.5 – 10.49 Yrs 19
>10.49 Yrs 23
No Info 13

Do you Rent or Own?
Own or Rent?
Homeowners will score more points.
Points Added/Subtracted
Own 25
Rent 15
Other 10
No Info 7

Existing Credit Cards
Existing credit cards and store cards.
Consumers who have both credit cards and store cards will score higher.
Points Added/Subtracted to Credit Score
None 0
Department 11
Major CC 16
Both 27
No Info 10

Have a Bank Account?
Bank Reference
Consumers who have both a checking and savings account will score higher than those with only one type of account or none at all.
Note: If you have been denied a bank account due to bad credit you can open a guaranteed checking account .
Checking 5
Savings 10
Both 20
Other 11
No Info 9

Debt Ratios
Debt Ratios
The lower the debt ratio, the higher the score.
<15% 22
15-25% 15
26-35% 12
26-49% 5
>50% 0
No Info 13

Number of Inquiries
Number of Inquiries
Consumers will be penalized for having more than 3 inquiries.
0 3
1 11
2 3
3-4 -7
5-9 -20
No Record 0

Age of Credit File
Years in File
Consumers with older consumer credit files score higher.
< 1 Year 0
1-2 Years 5
3-4 Years 15
5-7 Years 30
>8 Years 40

# of Revolving Lines
Number of Revolving Lines
Consumers with 1-2 revolving lines score higher than those without any, or with more than 3
0 5
1-2 12
3-5 8
>6 4

Unused Balances
Percentage of Balances Available
Those with an unused balance of 0-15% score highest. Those with high unused balance percentages are penalized.
0-15% 15
16-30% 5
31-40% -3
41-50% -10
>50% -18

Derogatory Credit
Derogatory Credit
Derogatory credit will significantly lower a consumer’s credit score.
No Record 0
Any Record -29
Slow payment -14
One Satisfa. 17
Two Satisfa. 24
Three Satisfa. 29

Factors that cannot Influence Credit Scores
Age
Gender
National Origin
Sources of Income
Race
Religion
Marital Status
Income Level

Secrets to Getting a High Credit Score
Don’t move too often, buy a house and stay there =)
Avoid derogatory credit at all costs
Maintain a unused balance between 0-15% and do not go above 30%
Maintain 1-2 lines of revolving credit
Open and keep a credit card and department store card
Open and keep a checking account AND a savings account
Keep your debt ratio below 15%

Credit Score Rating Factors

by Bad Credit Advisor on Jan 31, 2009

Accessibility

Categories

Tags

Upload Details

Usage Rights

1 Embed 1

Statistics

Credit Score Rating Factors — Presentation Transcript