Video: FICO’s 5 credit rating factors
If you ever wish to buy a house, get a vehicle, rent a home, or simply not get gouged on your month-to-month costs, you need to probably know your credit rating. And the king of credit history? FICO.
Your FICO rating is formulated utilizing a bunch of expensive estimations and secret formulas, however the part you have to learn about is really pretty simple. It’s comprised of 5 fundamental factors.
1. Payment history
Your length of your credit report comprises another 15 percent of your credit score. The longer your accounts have been open, the much better. And if you’re new to credit? Sorry, however that harms your score.
4. New credit
New credit makes up another 10 percent of the FICO rating. But the term is a little misleading, because the goal is to have less new accounts. Taking on too much new credit simultaneously makes you look desperate. No one likes desperate.
5. Credit mix
Credit mix makes up the final 10 percent of your FICO score. Lenders wish to see that you can deal with different types of credit– a vehicle loan, a home mortgage, charge card. Mix it up, and you need to be in great shape.
FICO may be king, however when you understand how the system works, you’re one step closer to being the ruler of your credit history.
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