If you opt to get your credit score with your report, it will be generated for you at the time of your report. Your score is a static number and applies at the time you pull your report. If anything was reported even a few minutes after you pulled your report, you will have a dynamically different score. Since you can not have continuous monitoring of your score and since you should not pull your score often, it is good to understand what makes up your score.
When calculating your scores, your data is compared to a control group of approximately 10,000 other consumers with similar credit profiles to you. Your score is calculated as it compares to the rest of the consumers in your control group. Because control groups vary and are random, you will never be certain what your score will be. In addition, your score will vary between CRAs.
- Equifax scores range from 300 to 850
- Experian scores vary from 330 to 830
- TransUnion scores vary from 150-934
The CRA’s themselves do not have the formula for calculating credit scores, however a company named Fair Isaac has actually developed a scoring model known as FICO. While the exact formula for the calculation of your score is top secret, the FICO takes into account the following categories:
- Payment History – 35%
- Amount of Debt – 30%
- Length of Credit History 15%
- Types of Credit 10%
- New Credit 10%
PAYMENT HISTORY
Your pattern of making payments is the most heavily weighted part of your score. How often you have been late, how recent you have been late, and the severity it has been late all factor in to this section. If you had a 30 day late on a credit card 2 years ago, it would not weigh as heavily as a 30 day late on the same credit card 2 moths ago. Similarly if you had a 3o day late on one credit card and a 60-day late on another credit card, the 60-day late is more severe and would bring your score down farther. As for patterns of payments, if you have been late on a credit card one time in the past, it will not weigh as heavily as missing payments over a long period of time.
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