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How to Determine Credit Score

credit-scores

Lenders like credit companies and banks make use of credit scores in order to evaluate potential risk which is posed by the lending money for consumers. There ways in order for you to determine your credit score. These ways will help you in understanding more your credit score.

 

The following are the ways:

 

  • Former payment history

One of the most weighted attribute is your record upon paying your debt accounts. Instances like late payments, judgement, collections, foreclosures, liens, wage and bankruptcies are all part of the category.

 

  • Recent indebtedness level

This part takes into account whether you extended too much or not. If you have lots of credit cards and you keep your credit accounts near to the maximum limit, it will give them the sign that you cannot manage your credit responsibly.

 

  • Length of the credit history

If you have obtained good standing credit, you will not meet any risk. This score takes into consideration the age of your account.

 

  • Pursuit of up-to-date credit

If you have opened credit accounts at a time, that will give you risk indictor. The enquiries that you have done can also produce great effect however; the credit scores can differentiate between searching for different accounts and shopping for primary loan. This will greatly help in avoiding collections that provides negative impact to the credit score.

 

  • Available credit types

This considers the different credit accounts that you have like retail accounts, credit cards, accounts on finance companies, instalment loans as well as your mortgage. The main goal is to identify whether you have healthy credit or not.

 

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