The actual formulas used to calculate credit scores are the property of private companies and are not available to the public. This means it is not possible to know exactly how many points your score will go up or down based on the actions you take.
However, the main factors that are used to calculate your score include:
Use of available credit
Length of inquiries
types of credit
Let's discuss PAYMENT HISTORY:
This is the most important factor for your credit score. It shows:
*When you paid your bills
*Late or missed payments
*Debts you did not pay that were written off or sent to a collection agency
*Whether you have declared bankruptcy
Your score will be damaged if you:
*Make late payments - the longer it takes you to make your payment, the
worse the impact on your credit report and score will likely be.
Have accounts that are sent to a collection agency
Withhold payment due to a dispute and the lender reports your payments as late.
With Certain financial products, any payment you make on time will not
be counted and will NOT improve your credit score. However, if you miss
payment and your account is sent to a collection agency, this CAN be
included and will damage your credit score. These products include:
Chequing and saving accounts
Telecommunications accounts, such as mobile phone and internet, are
exceptions. Payment you make on time as well as late payments MAY be
considered for your credit score.
If you have any questions feel free to PM me or just post your question below.
Tomorrows topic - Use of available credit
Building, Improving and Securing Credit through safe, secure and affordable solutions