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Here a credit score, there a credit score, every where a credit score. Some of us don’t want to even think that a little 3 digit number can trouble us, but it does. Three credit reporting agencies keep track of our debt payment records; Equifax, Experian, and TransUnion with their Fico Scoring models BEACON score, Experian/Fair Isaac Risk Model, and EMPIRICA. Each agency is going to score a little bit different but here is a break down of what makes up a credit score.

This mysterious number is what determines the cost of debt to individuals. The credit score range is between 300 to 850 and currently the average is 723. The higher number means lower cost of debt, and the lower the score means higher the cost of debt. Let’s take a look what makes up a credit score.

1. 35% of the score is Payment History.

2. 30% of the score is Amount Owed.

3. 15% of the score is Length of Credit History.

4. 10% of the score is New Credit.

5. 10% of the score is the Type of Credit Used.

 Notice what makes up 65% of your score—on-time payment and the amount of debt you owe. The more debt you owe, the LOWER you score will be. Another great source of information for you credit score is a free website www.myfico.com.

I hope this helps you out and this is the reason for making the right decisions before taking on debt. Wanted to leave you with another reason why you need to be concerned about your credit score. Check out these numbers and see how much more you are going to pay for debt.

Again, Hope this helps and have a glorious day!

Source: Informa Research Services and www.myfico.com Interest rates accurate as of December 15, 2009. Based on a $300,000 loan. Other conditions my apply.