Your credit score is the barometer by which creditors determine whether or not they want to loan you money. Your credit score will tell them, in an easy three digit number, how good you have been with credit in the past, and what your risk of default in the future is. For creditors, the credit score is the most important tool they have for loaning money safely. For you, your credit score is your greatest tool to getting the credit that you need to live your life.

So, how is your credit score made up?

The largest portion of your credit score is made up of your payment history on bills in the past. A full 35 percent of your credit score is made up of this. If you pay all your bills on time, then your payment history will be much better and your credit score will be better as well. However, if you are over 30 days past due on your bills, then you will find your credit score is falling faster than a stone in water.

Just under one third of your credit score, 30 percent, is made up on how much credit you have and how much credit you have used. If you have used a lot of your available credit, then you run the risk of having a lower credit score. You should never use more than 30 percent of your available credit. If you do, your credit score will be much lower. Creditors do not want someone who cannot manage their credit, with one of their loans.

Roughly 15 percent of your credit score is determined by the length of your credit history. If you have a short, or new credit history, then your credit score will be lower because the risk for default on the loan is higher. However, if you have a long credit history, then your credit rating will be much better as a result.

Ten percent of your credit score is based on the variety of credit you have. You should try and have two credit cards, a mortgage, a car loan and one other type of loan to be as diversified as possible and have the best credit score possible.

Lastly, ten percent of your credit score is based on inquiries. Many people do not realize that the more you look for credit, the worse your credit gets. Try and get credit too much, and you can end up looking like a compulsive borrower and lower your credit score.

Turning Point Debt Settlement can help you get a much better credit rating by aiding you in repairing your credit through debt settlement solutions that use fixed monthly payments over the course over one to three years.

This entry was posted on Friday, February 6th, 2009 at 8:56 am and is filed under Blog. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.