How Do Is Your Credit Score Determined

 

What Determines Your Credit Score?

 

Are you worried about making a good impression on financial institutions who may be handling your auto loan? A lot of companies rely on your credit score to build their first impression of you, regardless of whether that's a good or bad thing. However, a lot of different factors go into determining your credit score.

 

Number of accounts

 

All of your open credit accounts -- other loans, all your credit cards, mortgages, and whatever else falls into this category -- will be taken into consideration.

 

Utilization rate

 

Even if you are only using some credit at the moment, financial institutions will look at how many credit card balances you actually have open divided by your total credit card limits. The resulting percentage is called your "utilization" rate.

 

Making payments

 

Do you make all of your payments on time? It's actually healthier for your score to have a few debts that you can manage than to have no debt at all -- or to be behind.

 

Age of accounts

 

A longer, well-managed credit history is more impressive than a relatively new credit history with no issues.

 

Total number of inquiries

 

Every time a financial institution requests your credit information, that's called a "hard inquiry." Multiple hard inquiries all at once can negatively impact your score.

 

Derogatory marks

 

Last of all, things like bankruptcies, foreclosures, and collections will obviously bring down your credit score.


If Financial inquiries interest you, especially your own, stop by Royal Moore Mazda's Finance Department today and we'll help any way we can.