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CREDIT
Credit is no longer a luxury but a
necessity.
If you don’t have credit, it’s time to establish
credit. If
you’ve had credit problems in
the past, now is the time to correct your credit and
improve your credit score.
What is a credit score? According to
FICO (Fair Isaac Corporation), it’s the number that
helps lenders predict how likely you are to make your
payments on time.
Each score is based on information in your credit
report.
Scores range from 300 – 850. The higher the
score, the less risk you represent. The higher score
usually means you get a better interest rate as
well.
What is in your
credit score?
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Payment
History 35%
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Types of accounts
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Public records, collection items,
delinquent accounts
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Severity of delinquency on accounts
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Number of past due accounts
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Number of accounts paid in a timely
manner
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Amounts Owed 30%
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Amount owed on accounts
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Amount owed on specific types of
accounts
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Number of accounts with balances
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Proportion of credit lines used
(balances vs. limits)
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Time since accounts were opened
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Length of Credit
History
15%
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Types of Credit
in Use
10%
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New Credit 10%
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Too many recently opened accounts can lower your score
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Types of recently opened accounts
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Number of recent inquiries
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