1. Credit Score Analysis

    General range:

    Above 700: Low risk to lenders; demonstrates good financial health

    Below 600: High risk to lenders; you could get higher interest rates or get turned down for a loan or credit application

  2. A good credit score can help you:
    • Lower your interest rates.
    • Speed up credit approvals.
    • Reduce deposits required by utilities.
    • Get approved for apartments.
    • Obtain better credit cards, car loans, and mortgage offers.

  3. What makes up your credit score?

    Note: These percentages are approximations; they are not exact.

    35% -- Payment History
    Late payments, bankruptcies, and other negative items can hurt your credit score, but a solid record of on-time payments helps your score.

    30% -- How Much You Owe
    Credit scores look at the amounts you owe on all your accounts, the number of accounts with balances, and how much of your available credit you are using. The closer you are to your credit limit, the lower your score will be.

    15% -- Length of Credit History
    A longer history of using credit responsibly will increase your score. However, you can get a high score with a short credit history if you made all of your payments on time, or paid off your credit cards quickly.

    10% -- New Credit
    If you recently applied for or opened new credit accounts, your credit score will weigh this fact against the rest of your credit history.

    10% -- Other Factors
    Several minor factors also can influence your score. For example, having a mix of credit types on your credit report -- credit cards and installment loans, such as a home or car loan -- are normal for people with longer credit histories and can add slightly to their scores.

  4. How to boost your score:

    • Pay your bills on time. Late payments or defaults can really hurt your score.
    • Keep balances low on credit cards. High debt levels can hurt your score.
    • Apply for and open new credit accounts only when you need them. The most important way to improve your score in this area is to pay down your revolving credit, like credit cards.
    • Check your credit report regularly for accuracy, and contact the creditor and credit reporting agency to correct any errors.
    • If you have missed payments, get current and stay current. The longer you pay your bills on time, the better your score.

    Specific Actions to Raise a Credit Score:

    Action, Score Change:
    1. Pay off accounts, +80
    2. Build history of paying on time, +40
    3. Pay down credit balance, +40
    4. Pay down further and no new accounts, +50
    5. Pay all overdue payments and keep loan current, +20
    6. Six months of on-time payments, +30