Page 11 - increase your credit score

3

How Your Credit Scores Are

Calculated

As we mentioned in the last chapter, the three main credit bureaus gather your debt and

credit information to construct a credit history that lenders can use to judge how likely
you are to repay your debts.

These bureaus also take this information and run it through scoring models provided by

FICO or VantageScore. FICO and VantageScore occasionally create new scoring models
based on consumer trends, kind of like how app developers release updates.

For this reason, every consumer has more than one credit score, which is why we like to

use the phrase “credit scores.” Each credit bureau has slightly different data they collect
about you, so each score tends to be slightly different.

While your credit scores are made up of more than 100 factors, there are five general

principles that have the most influence on your score, FICO says.

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