Calculation of Your Credit Score

Think Credit Reports provides credit reports and monitoring to customers on a subscription basis. In addition, Think Credit Reports helps its customers to understand how their scores compare to national averages and creditor expectations.

Determined by an individual credit bureau, the credit score assigns a number to an individual’s level of responsibility in borrowing and repayment. Scores range from 0 to 800, though most scores lie between 600 and 750. A score incorporates information about the borrower’s payment history, amount owed, types of credit used, amount of new credit, and length of time the person has been borrowing.

For most borrowers, payment history makes up 35 percent of a credit score. This information refers to timeliness of past repayments. Another 30 percent of the score relates to the amounts a borrower owes. Relevant information for this category includes how much of a person’s available credit is being used and how much he or she owes on particular types of accounts.

Types of active credit contribute to 10 percent of a person’s credit history, while the number of new accounts contributes to another 10 percent. If a borrower does not have a long credit history, multiple applications may lower the total score. Credit scores also take into account how long a person’s accounts have been active and how long he or she has had accounts. These factors combine to form a complete picture of an individual’s use of credit throughout his or her lifetime.

How Identity Theft Can Impact Credit Scores

Based in Valencia, California, Think Credit Reports offers people the ability to monitor their creditworthiness and continuously receive updated credit reports from Experian, Equifax, and TransUnion. Think Credit Reports’ services are particularly vital, given an increase in identity theft, which can have an outsized impact on people’s ability to get loans and mortgages or to get them at good rates.

Identity theft can derail individuals’ financial well-being in a number of ways. In cases where a personal credit card is used fraudulently, victims may be unable to promptly pay for the extra charges that have accrued. By the time that the situation is resolved by the lender, long-term damage to the credit report (which is difficult to undo) may have occurred. This threat is particularly acute when thieves redirect bills to new addresses, resulting in cardholders being completely unaware of fraudulent transactions that have gone through. Identity thieves may also target personal savings and checking accounts, draining funds in ways that make it impossible for victims to pay mortgages, rent, and bills before irreversible harm has been done to their credit score.