Credit Score

What is a Credit Score?

Your credit score, or FICO score, is a number that reflects your financial responsibility at the time the credit report is ordered.  The information helps lenders decide if you’re a good worthiness or at a credit risk.  Your score is based on – but not part of – your credit report. It’s generated at the time of a request to pull your credit and is noted on the credit report.

What Determines My Credit Score?

Payment History

The factor that has the biggest impact on your score is whether you’ve paid past credit accounts on time. However, an overall good credit picture can outweigh a few late payments overtime by re establishing or a continuance of a paying your current credit accounts on time.

Amounts Owed

Open credit accounts and owing money doesn’t mean you’re over extended.  However, owing a high percentage of the approved limit on a loan or credit cards or personal debt could suggest that you are financially overextended and may impact the decision to qualify for a loan.  Part of the science of scoring is determining how much debt is too much for a given credit profile.

Credit History
A longer credit history will have a higher probability to increase your FICO score. It shows that you are responsible and can manage your credit over time. However, even people who have not been using credit very long may get high scores, depending on how the rest of their credit report looks.

Length of Credit
In general, a longer credit history will increase your FICO score.  A credit history for 2 or more years will benefit the borrower’s credit worthiness by proven he/she is responsible for managing credit over time. However, even people who have not been using credit very long may get high scores, depending on how the rest of their credit report looks.

New Credit 
Today, people tend to have more credit by easily shopping for new credit either in the store or on line. But opening several credit accounts in a short period of time can represent a greater risk – especially for people with a short period of time credit history. Opening new credit accounts may drop the FICO credit score because the creditors orders a report under your name to determine your qualifications that is considered an inquiry on the credit report. The credit score model may review the inquiries as too many open accounts in a short period of time triggering a greater risk of borrowing too much money that could reduce the FICO score. The explanations as to why the credit was pulled will not be disclosed on the report.

Information on the Credit Report
The information is a combination of credit cards, retail accounts, installment loans, auto loans, finance companies, and mortgage loans and derogatory credit if applicable and public record if applicable.  While a healthy mix will improve your score, it is not necessary to have one of each, and it is not a good idea to open credit accounts you don’t intend to use. The credit mix usually won’t be a key factor in determining your score.



Interpreting Your Credit Score

The formula or reasons for your current credit score is listed below. These reasons can be very useful in helping you determine how you might improve your score over time, and whether your credit report might contain errors.
If you already have a high score (for example, in the mid-700s or higher) some of the stated reasons for credit concerns may not be very helpful, as they may reference the factors that have the least impact on your score, such as: length of credit history, new credit and types of credit in use.

Ten most common explanations:

  • You have one or more accounts with late payments
  • You have one or more accounts that have gone to a collection agency
  • You have one or more accounts that are recently past due
  • Number of months past due
  • You have numerous past due accounts
  • You have too much debt
  • The balances on your credit cards are too high in comparison to your approved limits
  • Your credit history is not long enough to show responsible credit management
  • Too many accounts with balances – concern over your debt load

More questions?  Contact Annamarie Rita Scarselletti at 267-382-0690 or email to

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