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 and Why a Credit Bureau Collects Information

Based in Valencia, California, Think Credit Reports provides customers with data from all three major credit bureaus. Think Credit Reports has interacted with these credit bureaus for more than five years.

As independent organizations, credit bureaus work to collect and dispense information that supports responsible lending. The credit bureaus obtain purchase, borrowing, and repayment information about consumers from data reports that subscribers submit on client accounts. This information tells the credit bureaus about any defaulted or late payments, accounts in arrears, and accounts in good standing.

Credit bureaus offer their services to a broad range of financing entities, including credit card companies and mortgage lenders. When a lender wishes to know about a particular individual’s credit history, one or more credit bureaus collect this data and offer it in the form of a credit report. The lender can then make more informed decisions about whether a borrower is likely to make on-time payments based on their past behavior. If the lender approves the borrower’s application for credit, information about the account then becomes part of the individual’s future reports.