I am EXCITED and PUMPED about my new book for high school students, college students, and twenty-somethings – What Everyone Should Know About Money Before They Enter THE REAL WORLD.
To celebrate the release of this book, I am sharing one of the chapters of this book (see all of the chapter titles HERE)
Here is another section of the “Credit Scores” chapter:
Everyone Should Know â€¦
The key measurements that determine a credit score.
The credit reporting agencies are secretive as to how they calculate credit scores, but it is well known that credit scores are directly impacted by the following items:
- Type of credit issued
- Revolving debt (credit card)
- Installment debt (anything with payments and a pay-off – car loan, boat loan, student loan, etc.)
- Age of the credit relationship
- Amount of credit one can obtain (total of all credit limits)
- Amount of credit one has consumed (percentage of total credit limit)
- Payment timeliness
- Requests for credit
- Outstanding judgments
According to FICO’s publication, Understanding Your FICO Score, a FICO credit score is determined in the following way for the general population.
FICO scoring breakdown [from FICO’s publication, Understanding Your Credit Score]
For people who are just establishing credit, it will be different since payment history is not yet available.
More from this chapter tomorrow!
Read the entire series HERE
Learn more about the book and RESERVE YOUR COPY (ships 12/15!) at its dedicated website HERE