New Book – Chapter on Credit Scores – Part Two

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:

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Everyone Should Know …

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 Score Pie Chart High-Res

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.

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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

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