The Diverse Factors That Determine Credit Scores

Think Credit Reports is a Valencia, California, firm that offers customers nationwide tools for accessing their current credit reports and protecting against identity theft. Think Credit Reports customers receive Equifax, TransUnion, and Experian scores each quarter and are notified automatically each time a major transaction, such as a mortgage or auto loan payment, is processed.

The credit score acts as a widely accepted measurement of individuals’ financial solvency and how likely they are to make good on debt obligations. In addition to being accessed by lenders prior to approving loans at specific interest rates, reports are also increasingly checked by employers and landlords prior to making decisions about hiring or renting to applicants.

As a general rule, anyone maintaining a credit score exceeding 720 has excellent credit and will likely be able to access loans at optimal rates. People with scores lower than 620 may experience difficulty in taking out loans and will incur high interest rates on those that they do qualify for.

The factors that make up the credit score are complex and varied, but as a general rule, 35 percent has to do with simply staying current on bills. Outstanding balances make up 30 percent of the score and have to do with the balance-to-limit ratio on credit cards. Account age defines 15 percent of the score, while the makeup of available credit affects 10 percent of the score. Other factors, such as the number of credit inquiries, also influence the ultimate score received.

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