People generally know how important it is to have a good personal credit score. However, they might not know how one gets put together. Here’s the nuts and bolts of the ingredients in those numbers.
These scores generally range from 300 on the low end to 850 at the high end.
The number one metric for your personal credit score is your payment history. Thirty five percent of your entire score is determined by the numbers found here. It’s essential to pay your bills on time to any creditor who submits information to one of the three credit bureaus. It’s important to keep in mind here that even unpaid parking tickets and library fines can show up on your credit score.
What you owe
A full 30% of your credit score is determined by how much credit you owe. This is placed alongside the total credit available to you. If you’re maxing out your credit cards, it’s bound to hurt your overall score.
How long you’ve had credit
Another big indicator is how long you’ve had credit. Although this doesn’t factor as predominantly as some of the other metrics, it still counts for 15% of your overall personal credit score. The credit bureaus also take into account the length of time that you’ve had credit and how much you actually use it.
How many accounts you open
Your personal credit score also depends on how many accounts you’ve opened recently. It’s important to be responsible with the credit that you have and any new accounts that you take on.
The best personal credit scores take all these factors into account. Generally, the ones that will give you the most credit are about 700. Paying your bills on time is one of the quickest ways to a top personal credit score.