How to Quickly Determine Your Credit Rating

A Simple Way to Calculate Your Credit Score

You input information about your credit history and are given a score or range of scores that fit your profile. Credit score calculators are great tools to help you learn what to expect when applying for a new credit account. In addition, knowing your score means knowing what interest rates are fair. That can save you a lot of money. Here is a guide to using a credit calculator. What is the perfect way to find the age calculator?

Credit Score Formula

Before calculating your credit score, learning how that number is determined is essential. FICO scores are calculated through the information on your credit report. About 35% of your score comes from your payment history. This is listed under each account. Late payments lower your score. If your account gets to 120 days delinquent, your score will take a massive hit. 30% of your credit score comes from your debt-to-credit ratio.

This is also called utilization. While installment accounts do have an impact on your score, it is revolving accounts that make up the bulk of this 30%. The closer your credit balance is to your credit limit, the lower your credit score will be. The length of your credit history accounts for 15% of the score. This is computed by calculating the average age of all accounts.

Opening a new account will lower this number and consequently lower your score. The types of credit you have understanding for 10%. Your credit report should have a mix of installment and revolving accounts. If you don’t have any credit cards, your score will suffer. The last 10% comes from the credit inquiries you have. Inquiries impact your score for up to two years. It is essential to know that recent negatives affect your score more than older negatives. If you have a late payment from four years ago, it won’t hurt you nearly as much as one from a year ago.

Information Needed to Obtain Score

No matter what tools you use to estimate your credit score, you will need certain information. The first step is to put in the age of your accounts. You will usually be asked to add the date of your oldest account and your newest version. This provides the score calculator with the approximate age of your credit history. The next step is putting in the types of accounts you have. For example, you will be asked how many open revolving and installment reports you have. You will also be asked if you have any accounts charged off or in collections. In addition, if you have any judgments, bankruptcies, serious delinquencies, or other credit issues, you will list those as well.

Once the credit score calculator has your basic information, it is time to list specifics. A credit score calculator will need all your credit cards’ credit limits and balances. You must add the limits and balances from each card with that information; the credit score calculator determines your credit utilization. You may also be asked to add the balances and original amounts for your installment loans to get a more precise score.

The next step is adding your payment history. You can list any late payments you have on your credit report. To get an accurate score, you can record how many days you were on the account and how recent your late payment was. Credit score calculators will ask for varying levels of detail regarding payment history. If you can provide more information, you will receive a better indication of your score. Lastly, you will be asked how recently you applied for credit.

Estimating Your Score

You will receive a reasonably accurate credit score assessment if you provide all the information above. The questions asked by credit score calculator tools cover all of the basics. It will calculate your score by evaluating the payment history data, types of accounts, age of funds, and debts. After providing you with a score, you will also receive a detailed breakdown of how it was determined. For example, you will see that in the analysis, if the issue was not having enough diversity in your accounts, the study will help you learn how to increase your credit score.

Credit score calculators may not provide your actual FICO score, but you will get a reasonably close approximation. This can help you decide if applying for new credit is right for you. It can also help you determine if you can refinance a loan. Using a credit score calculator is a great way to help you see where you stand financially and what you can do to improve your situation.

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