Credit Score Research Paper

Credit scores are based on many factors and each financial institution may have specific methods unique to their scoring. But there are three common pillars that dictate your overall credit score that are common to most financial institutions. You need to address these three pillars in order to raise or increase your credit score.

These three pillars of your credit score are payment history, amount of used available credit, and length of credit history. These three areas make up about 80% of most credit scoring. Many financial institutions start off with your FICO score, which is based on a system developed by the Fair Issac Company to determine a numeric value based on your previous and ongoing credit transactions. Although many financial companies then apply some individual factors, your FICO score is often the beginning score.

Payment history is simply the information that any creditor has reported on your payments made during the term of your transaction. This could be a mortgage company, local bank or credit union, or even a department store reporting on a revolving credit account (charge account). This is why it's important to get a current copy of your credit score and review it for any errors or incorrect information. Some companies may not report your credit transaction so
Make any payments on time, check your current credit reports for accuracy, and keep your debt to credit available below 50% and you should be in good shape. If you don't have any credit history, it's a good idea the next time you want to purchase something to buy it on credit. Make sure you make your payments on time and that the credit source does report to the major credit reporting agencies. You can start small and slowly build up some positive credit history. Never enter into any credit agreement without carefully reviewing the terms and make sure you can afford the