You enter information about your credit history and are given a score or range of scores that match your profile. Credit score calculators are great tools to help you learn what to expect when applying for a new credit account. Knowing your score means that you will know what interest rates are fair. That can save you a lot of money. Here is a guide to using a credit calculator.

Credit score formula

Before trying to calculate your credit score, it is important to know how that number is determined. FICO scores are calculated from the information on your credit report. About 35% of your score comes from your payment history. This appears on every account. Late payments lower your score. If your account reaches the 120 day lag point, your score will take a massive hit. 30% of your credit score comes from your debt / credit ratio. This is also called utilization. Although installment accounts have an impact on your score, it is the revolving accounts that make up the majority 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 represents 15% of the score. This is calculated by calculating the average age of all accounts. Opening a new account will decrease this number and consequently decrease your score. The types of credit he has represent 10%. Your credit report must have a combination of fees and revolving accounts. If you don't have a credit card, your score will be affected. The last 10% comes from the credit inquiries you have. Queries impact your score for up to two years. It is important to know that the recent negative impacts your score more than previous negatives. If you have a late payment from four years ago, it won't hurt as much as one from a year ago.

Information Needed to Score

No matter what tools you use to estimate your credit score, you will need some information. The first step is to put in the era of your accounts. Typically, you will be asked to add your oldest and most recent account date. This provides the score calculator with the approximate age of your credit history. The next step is to put the types of accounts you have. You will be asked how many open and renewable accounts you have. You will also be asked if you have charged or receivable accounts. Also, if you have lawsuits, bankruptcies, serious delinquencies, or other credit problems, it will also list them.

Once the credit score calculator has your basic information, it's time to list details. A credit score calculator will need the limits and balances of all your credit cards. Just add the limits of each of your cards, as well as the balances. With that information, the credit score calculator determines your credit utilization. You may also be asked to add your original installment loan balances and amounts for a more accurate score.

The next step is to add your payment history. You can include any late payments you have on your credit report. To get an accurate score, you can list how many days past due you were on the account and how recent your late payment was. Different credit score calculators will request different levels of detail regarding payment history. If you can provide more details, you will receive a better indication of your score. Lastly, you will be asked how recently you applied for credit.

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You enter information about your credit history and are given a score or range of scores that match your profile.