Credit Scores

A credit score indicates a person's creditworthiness based on the likely risk of a borrower defaulting on a loan over a period of time. The credit score is normally established by the financial data in a person's credit report.

Credit Monitoring enables you to enhance your credit score, and get the best deals from banks, credit card companies and lenders. 

Benefits of a Good Credit Score

Good credit-worthiness is indicated by high credit scores. This helps you to qualify for lower interest rates, get better loans arranged, and save money.

How credit scores are determined

Debt Payment history is the most critical aspect of the credit score. Approximately 35% of the score is based on your past bill payments. Late payments and debt collections negatively affect the credit score.

Current debt is the second largest indicator of credit score. Approximately 30% of the score is based on the number of outstanding debt payments. Ideally, credit cards and lines of credit should be 25% or less of their total limits. Above 25% begins to reduce your credit score.

Length of credit history influences about 15% of the credit score, based on the time you've had loans, credit cards, and other forms of credit. Longer payment histories provide banks and lenders with more data with which to calculate credit-worthiness. Past payment patterns indicate your ability to make future payments.

Credit Types makeup about 10% of the credit score, assessed by the number of loans, credit cards and types of credit detailed in the credit report.

Number of inquiries is approximately 10% of your credit score. Applications to banks and financial companies for credit cards, loans, etc., creates inquiries when they check your credit report. This lowers the credit score as it indicates additional debt. More recent inquiries have the greatest influence on your credit score.