Bad Credit Debt Relief

Credit And You

In this post I’m going to briefly explore and talk about what makes up your credit score. With hard money lenders, your credit score did not usually make a very big difference. These days, however a lot has changed, and even in the hard money area, your credit is playing a larger role in lending decisions.

Most people are very under informed and uneducated when it comes to knowing and understanding the makeup of their credit score. Here is a basic breakdown on credit score factors:

35% of any credit score comes from how you have made payments. This is the largest of the credit score factors, and the newest reporting is weighted the most. The items that make up this category are

• Charge offs
• Judgements
• Foreclosures
• Collections

The next largest chunk of your credit score comes from accounts owed. Credit cards, mortgage loans, car loans, lines of credit and boat loans all make a difference in this section.

15% of your credit score is made up of the length of credit history, how long your various credit cards and other loans have been open in other words.

10% comes from recent activity. Having your credit pulled falls under this section.

Finally, the last part comes from the type of credit that you have used.