::Credit Score - Free Credit Report

Your credit score is a number generated by a mathematical algorithm -- a formula -- based on information in your credit report, compared to information on tens of millions of other people. The resulting number is a highly accurate prediction of how likely you are to pay your bills. The credit scoring system became prevalent during the 1980's as a way for lenders to quickly evaluate a potential borrower's creditworthiness. The system was found to accurately predict financial risk over time and grew to several different industries. Now credit scoring is used by lenders, insurers, landlords, employers, utility companies and even judges to evaluate your credit behavior.

	Credit scores are calculated from a lot of different credit data in your credit report. This data can be grouped into five categories as shown below. The percentages in the chart reflect how important each of the categories is in determining your credit score.

	These percentages are based on the importance of the five categories for the general population. For particular groups - for example, people who have not been using credit long - the importance of these categories may be somewhat different.

	Payment History

		Account payment information on specific types of accounts such as credit cards, installment loans, retail accounts, finance company accounts, mortgage, etc.
		Presence of adverse public records such as bankruptcy, judgments, suits, liens, wage attachments, collection items, and/or delinquency/past due items.

	Your credit score is calculated using a complex algorithm that takes into account hundreds of factors and values. It is very hard to predict how one change on your credit report can affect your score in terms of points deferential. For a person with a high credit score, just one late payment can cause a significant drop. If a person has a low credit score, it may not cause a large drop at all. Keeping a healthy credit score requires good judgment and understanding of the system. Keep paying your bills on time, reducing your debts and removing negative inaccuracies from your credit report. Good financial behavior is the most important factors for your credit score and it will always reward you for the better.

	Amounts Owed

		Amount owing on accounts Amount owing on specific types of accounts Number of accounts with balances Proportion of credit lines used Proportion of installment loan amounts still owing

	Length of Credit History

		Time since accounts opened Time since accounts opened, by specific type of account Time since account activity

	New Credit

		Number of recently opened accounts, and proportion of accounts that are recently opened, by type of account Number of recent credit inquiries Time since recent account opening(s), by type of account Time since credit inquiry(s) Re-establishment of positive credit history following past payment problems


	Types of Credit Used

		Number of (presence, prevalence, and recent information on) various types of accounts (credit cards, retail accounts, installment loans, mortgage, consumer finance accounts, etc.)





	Lenders can use one of many different credit-scoring models to determine if you are creditworthy. Different models can produce different scores. However, lenders use some scoring models more than others. The FICO score is one such popular scoring method. Its scale runs from 300 to 850. The vast majority of people will have scores between 600 and 800. A score of 720 or higher will get you the most favorable interest rates on a mortgage, according to data from Fair Isaac Corp., a California-based company that developed the first credit score as well as the FICO score.