Page 330 - Keys To Community College Success

KEY 11.7 Different factors determine your credit rating.

Number of new
Number of new
credit applications
credit applications
10%
10%
Mix of credit
Mix of credit
How you pay
10% How you pay
10% your bills
your bills
35%
35%
Length of 15%
Length of 15%
credit history
credit history
30%
30%

Amount of money you
owe and the amount of
Amount of money you
available credit
owe and the amount of
available credit

35% How you pay your bills.Always paying your bills on time is great; always paying
them late is bad. Declaring bankruptcy is worse.

Amount of money you owe and the amount of available credit. Statistically,
11 30% people who have a lot of credit available tend to use it, which makes them a less
attractive credit risk.
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Length of credit history. In general, the longer you’ve had credit, the more
15%
points you get.

Mix of credit. Statistically, people with a variety of credit types usually
10% understand how to use credit better. Thus, having different types of credit—
such as credit cards, loans, and mortgages—looks better to creditors.

Number of new credit applications. Depending on the length and overall
health of your credit history, applying for new lines of credit in a relatively short
10%
period of time can make you look less reliable to lenders. Usually, multiple
applications are less favorable when seen on shorter histories.

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