CREDIT CONSIDERATIONS - Part 1

Your qualification for loans, your loan interest and insurance rates, and even employment, can depend on your credit score.  The most commonly used, the FICO score, developed by Fair Isaac Corporation, ranging from 300 (less desirable) to 850 (most desirable), is calculated using the following categories:

35% is Payment History - Timeliness of payments is a big part of your score.  Bankruptcy and past due amounts, and how recently they occurred, are factored here.

30% is Amount Owed - The proportion of the number of accounts that you have and balances owed to total credit available is a major consideration.

15% is Length of Your Credit History - More recently opened accounts count less favorably than older credit.

10% is New Credit - This consists of the ratio of the number of recently opened accounts to established ones.

10% is Types of Credit - A history of managing various types of loans (credit cards, retail accounts, mortgages, installment loans) can help your score.
Sources: Fair Isaac Corporation, www.myfico.com (the site where you can obtain your FICO score for a fee)

Next month: How to improve your FICO score . . .

~ CELEBRATING MY 25th YEAR AS A PHYSICAL THERAPIST . . . THANK YOU FOR YOUR REFERRALS! ~

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