How Your Credit Score is Calculated & Free Credit Reports

How Your Credit Score is Calculated

Understanding how your credit score is calculated is a crucial step in improving your score. Your score is made up of five components:

1. Your Payment History (35%): the largest part of your score is made up of your payment history and if you have demonstrated that you can pay your debts on time.

2. How Much You Owe (30%): credit bureaus are looking for how much debt you already owe prior to applying for more credit.

3. The Length of your Credit History (15%): Even if you have managed your credit effectively from day one, if you have a shorter credit history this can also mean your credit score can be lower.

4. New Credit Card Applications (10%): While it is reasonable for a creditor or lender to be cautious of the frequency at which someone is applying for additional credit, there can also be instances when taking on new credit card applications can actually be beneficial.

5. Types of Credit (10%): By maintaining a diverse range of credit types - credit cards, lines of credit, a car loan, a mortgage - this can be an excellent way to demonstrate your ability to manage your debts as a whole.

To follow your credit score without a hit on your credit be sure to download the new app for PEI Business Federation and INVIS at http://mopolo.ca/ - Be sure to Check Paul Trainor as your broker and get notified of any changes and FREE monthly updates and Free property valuations!


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