How Is My Credit Score Calculated?

Most people have heard of credit scores and realize how they can effect a person’s life. But, many people do not understand how a credit score is actually calculated. To help, we have broken down what makes up a person’s credit score.

1. 30% of Your Score= Amounts Owed

  • This takes into account how much money you owe and is based on the percentage of your used credit in relation to your available credit.

2. 35% of Your Score= Payment History

  • This takes into account whether you have paid past accounts on time and can include payments on the following:
    • Credit cards
    • Retail accounts
    • Installment loans
    • Mortgage loans
    • Finance company accounts

3. 15% of Your Score= Length of Credit History

  • This takes into account how long you have had credit history. Generally, a person with longer credit history will accumulate more points in this area. However, a person with less credit history can also achieve a great amount of points in this area. This area can be based on the following factors.
    • How long certain credit accounts have existed
    • The length of time since you have used the various accounts

4. 10% of Your Score= New Credit

  • This takes into account how many new credit accounts a person opens in a certain amount of time. This can negatively affect a person’s credit score if that person does not have a long credit history.

5. 10% of Your Score= Credit Mix

  • This takes into account a person’s mix of credit cards, retail accounts, finance company accounts, mortgage loans, and installment loans. Keep in mind that a persons without credit cards will be viewed as higher risks that those who manage credit cards in a responsible manner.

Are You Suffering Unbearable Debt? Let Wadhwani & Shanfeld Help You

The Sherman Oaks bankruptcy attorneys at Wadhwani & Shanfeld are here for you. Whether you are drowning in debt or are concern about other matters such as losing your house or car, our team can help you. When you become our client, we will take the time to understand the intricacies of your case and provide the best solutions based on your circumstances. When it comes to finances, our Sherman Oaks bankruptcy lawyers understand how stressful life can get. That is why we provide unmatched services for our clients.

Call today and see what Wadhwani & Shanfeld can do for you!

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