Everyone knows that if you have a good credit score, the easier it is to borrow money or get financing. A lot of credit seekers do not know how a credit score is calculated. There are many deciding factors in calculating your credit score, we hope you find this article helpful. How’s Your Payment History? This is what has the most impact on your score. Payment history will make up 35% of your final credit rating. This information is on your credit report. Creditors will be able to see your payment history when they view your credit report. Early monthly payments will most certainly benefit your credit score considerably. Slow paying is definitely a no-no in gaining a high credit rating. This will bring your credit score down faster than anything else, besides a bankruptcy. How Much Do You Owe? This can make up 30% of your credit file and is known as your debt ratio. This is described by the debt you owe versus your credit limit. For example we could be in possession of a credit card with a spending limit of $500 and you owe $480 this is a very large debt ratio and could have a negative affect. You should make an effort to reduce your credit card debt by 50% or lower, this will positively influence your credit score. If you pay off your credit card or keep your credit card debt under the 50% mark you will receive the exact same amount increase in your credit rating. How Long Have You Had Credit? The longer your credit has been established, the better. Lenders want to see that you consistently over a long period of time pay your bills. This is the third most important factor within your credit report. Many people make the mistake of closing accounts that they no longer use. If you have a credit card that you have had for over five years, keep the account alive. You don't have to use it, but this will extend the length of your credit history and that will help get your score up. What Type of Debt do you have? No matter what type of debt you may have this will count for 10% of your total credit score. There are different types of debts creditors will look for, they are loans, revolving credit & credit cards. The reason lenders rate the difference is because bank loans and store cards have set monthly payments. Let’s say for instance your revolving credit makes up your credit report, this will not help you. This is because lenders know that the monthly minimums will vary every month depending on how much you chose to spend. Applied Recently For A Credit Card? To keep your score high, the less times you apply for credit the better. This is responsible for 10% of your credit report. The amount of times you have asked for credit will stay on your report for two years. It is advisable to limit applying for credit cards & loans, over an over aging. People shopping around looking for a big purchase like a car, can fall into this trap. If you have gone to a few different car dealers while shopping for a vehicle and let them run a credit check report at each one to see if you’re credit worthy, you have now greatly reduced you score. It’s advisable not to let any lenders to run a credit report, until you’re ready to purchase. This is how your credit score is figured. Take on board these tips and your credit score will increase for sure. Your credit score total can be between 300 and 850. Obviously the higher the better for your credit rating.