“What I need from you is understanding, so simple as 1, 2, 3… Understanding is what I need” – Xscape

The majority of people understand the basics.  However, there are a number of complexities that could affect the average consumers credit.  If you pay your debts on time, don’t carry a high balance on your credit card(s), don’t close older accounts unless absolutely necessary and only apply for new credit when necessary, you will be in good shape.

Your credit report indicates your ability to handle debt responsibly and will help lenders decide if you are a desirable customer.  A high credit score can help you obtain low APR rates or secure special deals on loans. A low credit score may prevent you from securing loans and can hinder your ability to open a credit card, rent an apartment or even get a job.  A history of inability to manage your debts successfully will make lenders uncomfortable about trusting you.

Your credit score is determined by an algorithm developed by the Fair Issue Corporation better known as FICO.  The exact formula used to calculate your credit score is a tightly guarded industry secret.  Equifax, TransUnion, and Experian will provide general guidelines about financial behavior that can affect your credit score.

Payment History

Thirty-five percent of your credit score is made up by your payment history.  This includes all types of derogatory items such as late payments, collections, and even bankruptcies and tax liens.  Each type of account will stay on your credit report a specified period of time and each type of derogatory will hurt your score differently.


Your utilization is the amount of revolving credit you owe in relation to the amount of credit you have available.  You should always keep your utilization under thirty percent.

Length of Credit

Your length of credit relates to how long you’ve had credit.  There are several ways you can hurt yourself here.  If you close out your older credit card accounts it can affect your score negatively.

Types of Credit

Types of credit include revolving, installment and loans. Follow this link to know about pocket fruity review. By having different types of credit open, you show potential lenders that you are responsible.


Inquiries are marked on your credit report when you ask for new credit.  Inquiries made by yourself or for unsolicited offers do not count against your score, but are shown on your report as soft inquiries.  The hard inquiries are what you stay clear of.  Even though inquiries on make up 10% of your score, hard inquiries play a significant role with your credit score.

Understanding the different factors that make up your credit score can be challenging. Honestly, it is all a numbers game. If you are interested in gaining a better understanding about credit, visit www.increditablefinancialsolutions.com to book a discovery session.