What's in a Credit Score? There are three main credit reporting agencies in the United States that collect history to help lenders determine how likely you are to repay a loan. Each company collects and tracks financial and other personal information separately and so each credit report and each credit score can be different. However, each agency collects the same type of data. How are credit scores calculated? Credit scores may vary from agency to agency, but are generally calculated based on the following: The percentages in the chart reflect how important each of the categories is in determining how your credit scores are calculated. Determining your score is more complicated than just weighing the different aspects of your credit history. The credit scoring process involves comparing your information to other borrowers that are similar to you. This process takes a tremendous amount of information into consideration, and the result is your three-digit credit score number. Remember, no one has just one credit score, because financial institutions use more than one scoring method. For some agencies, the amount owed may have a larger impact on your score than payment history. Your credit score considers both positive and negative information in your credit report. Late payments will lower your score but establishing or re-establishing a good track record of making payments on time will raise your score. What affects credit scores the most? Your payment history is the most important aspect of your credit score because it shows how you’ve managed your finances, including any late payments. Your credit history is also very important, as it demonstrates how long you've been managing your accounts, when your last payments were made, and any recent charges. Boost your credit score Part of your credit score is based on the amount you owe as a percentage of the amount of credit available to you. This percentage is called the utilization ratio. If you are looking to boost your credit score, keep your utilization ratio below 25%. In other words, don't use more than 25% of your available credit. For example: If the total amount of credit available on your credit cards and lines of credit is $20,000, keep the total amount borrowed at or below $5,000. Review your credit report regularly It’s important to review your credit reports at least once a year to ensure that there are no errors and to help spot identity theft. To simplify things for consumers, the three leading agencies have established a centralized website where you can access all three credit reports for FREE once a year. Simply go to https://www.annualcreditreport.com/ We encourage all members to review your credit reports regularly. If you have questions about your report, we invite you to schedule an appointment with a member service representative to review it. Learn more information about your credit score Get your free annual credit report here Adapted from transunion.com and myFICO.com