Different scoring systems calculate your credit score, evaluating various factors. The most popular scoring system is FICO. Your FICO score is a three-digit number that shows the value of your credit. A credit score has a significant effect on your financial status, especially when you want to borrow a loan. The first factor a creditor considers is your credit score. From the amount of money you can borrow to the interest rate and payment conditions can differ due to your credit score. The good news is that you can learn to maintain a good credit score by improving the factors scoring models use to calculate your score.


Can you calculate your credit score?

Credit score modeling systems use complicated algorithms to model a customer’s payment behavior. Moreover, they include so many factors while calculating the credit score. However, they never release any information about these factors, and they keep them as trade secrets. There are some factors that they claim to be the most crucial ones. Therefore, all you can do is to improve these factors for maintaining a good credit score. We are going to discuss the most vital elements.

Credit score calculation essential factors:

1.Payment history

Your payment history is the critical factor that most credit modeling systems consider while calculating your credit score. Your punctuality and severeness in loan and credit payment are crucial. Late or differed payments can have a special adverse effect on the credit score.

2. CUR (credit utilization ratio)

The credit utilization ratio is a percentage that shows the amount of credit you had used considering your balance. Specialists suggest keeping this ratio under 30%. For a good credit score, you need to keep this number below 30%.

3.Length of credit history

Length of your credit history matters, too. The longer your account is, the better your credit score gets. Because possessing older accounts, prove that you are able to manage your credit well.

4. Quality of your accounts

Quality of your credit account includes items such as type of account, age of your accounts, and the number of your credit accounts.

5. Recent accounts

New credit accounts are considered as potential debts and can affect your score as well.

6.Number of hard inquiries

Any time you apply for a loan or ask to borrow money, the creditor requests a credit report of your account. When someone else, other than you, requires a report of your account’s history, it is considered a hard inquiry. A high number of hard inquiries in a short period shows that you have borrowed a considerable amount of money and can have a negative effect on your score.


Credit score matters because most of the time, it shapes your financial status. Different modeling systems use complicated algorithms to calculate your credit score. They mostly try to model your payment behavior and your finance management type. Fico and Vantage are two main scoring systems that evaluate your credit value by presenting a three-digit number. They consider plenty of factors to evaluate your score, but they keep them as trade secrets. However, some factors are proved to be essential in credit score evaluation. Factors such as payment history and account age and type, etc. make a long story short, you cannot calculate your credit score on your own, but you can maintain good credit by improving the factors we mentioned above. Contact our specialists for free credit counseling and finding out more about credit management plans.




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