Factors that Influence Your Credit Score
Though lending institutions and other credit-granting entities now view an individual’s credit score
as perhaps the most significant single piece of information in determining his or her creditworthiness,
this has not always been the case. In fact, it was not until the 1980s that the use of a formalized
credit score became a broadly adopted convention. Until that point the primary factor had been a lender’s
human assessment of an applicant’s ability and willingness to meet the terms of repayment and the existence
of sufficient collateral to cover the loss, otherwise.
Understanding the factors that influence your credit score can enable you to avoid falling into difficult
financial situations, and it is also an important part of making the right decisions as you rebuild
your credit. To learn more about the steps that you can take to improve your financial future, contact
the Arizona bankruptcy lawyers of the Harmon Law Office, L.L.C. at 480-829-0494.
Five Elements – One Score
Though there are several different bureaus that compile credit scores, the most widely used credit score
is the so-called FICO score. FICO is the acronym for Fair Isaac Corporation, the company that first
undertook to create a statistically-based model for calculating a credit score. The five different elements
that are included in your FICO credit score and their respective weightings are:
- Payment History – 35 %
- Amounts Owed – 30 %
- Length of Credit History – 15 %
- New Credit – 10 %
- Types of Credit Used – 10 %
Contact Us
The Arizona bankruptcy lawyers of the Harmon Law Office, L.L.C. are dedicated to helping debt-laden
individuals identify the best path forward, whether or not that includes filing for bankruptcy.
Contact
us at 480-829-0494 for the information and assistance you need.