Credit Scores & Analysis

Background

Your credit score is created using a mathematical formula that measures data from your credit report. Credit scores evaluate your payment behavior, debt levels and credit history. Factors like income, race and gender are not measured in the scoring process. Credit scoring systems are used by lenders,insurers, landlords, employers and utility companies to evaluate your credit behavior. Having a high credit score will help you receive the best rates on new credit and loans.

Explanation

There are several factors taken into account that help determine your credit score. The factors making the largest impact are listed below. Remember that these factors vary in how strongly they impact your credit score. For example, if you have a very high credit score, the negative factors in your analysis are likely to have a small impact. For very low credit scores, the opposite is true in that negative factors have a very large impact on your credit.

Anne, here's where you can improve:

Not enough revolving debt experience. [TransUnion, Experian] A healthy balance of credit and loan accounts is key to achieving a high credit score. It is important to build a record of responsible credit use over time with different types of accounts. Consider opening a new account to strengthen your credit report and improve your score. There are too many delinquent accounts on your credit report in comparison to the total number of account. [TransUnion, Experian] Payment history is a significant factor in the credit scoring process. Regular on time payments make you appear more creditworthy to potential lenders. On the other hand, late payments indicate that you may be in financial distress. If you have trouble remembering to make payments, consider signing up for an online bill payment service that will make it easier to pay on time. The balances on your bankcard accounts are too high in comparison with your credit limits. [TransUnion] Having credit available to you is a sign that you are able to manage your finances responsibly. Lenders like to see that consumers have a large amount of credit available to them,but not so much that they could spend more than they could afford to pay back. If you currently have multiple accounts open with high balances, try reducing your balances below 35 percent of your limits to improve your score. If you do not have many open accounts, consider opening a new credit account or asking your creditors to increase your limits in order to improve your credit score. You have not had enough debt experience. [Experian] A healthy balance of credit and loan accounts is key to achieving a high credit score. It is important to build a record of responsible credit use over time with different types of accounts. Consider opening a new account to strengthen your credit report and improve your score. There was recently a late payment posted on your credit report. [Equifax] Payment history is a significant factor in the credit scoring process. Regular on time payments make you appear more creditworthy to potential lenders. On the other hand, late payments indicate that you may be in financial distress. If you have trouble remembering to make payments, consider signing up for an online bill payment service that will make it easier to pay on time. Your revolving bank accounts have not been open very long on average. [Equifax] Time is one of the most important factors for a healthy credit score. The longer your accounts have been opened, the better they are perceived by lenders. Opening new accounts can cause your credit to appear unstable, because a record of responsible use has not yet been established for the account. Your credit score will improve as you keep your new accounts open, active and paid on-time. Your account balances are too high in comparison with your available credit. [Equifax] Having credit available to you is a sign that you are able to manage your finances responsibly. Lenders like to see that consumers have a large amount of credit available to them, but not so much that they could spend more than they could afford to pay back. If you currently have multiple accounts open with high balances, try reducing your balances below 35 percent of your limits to improve your score. If you do not have many open accounts, consider opening a new credit account or asking your creditors to increase your limits in order to improve your credit score.

Additional Information

The TransUnion TransRisk New Account Credit Score is provided to help you better understand how lenders view your credit report. It is not an endorsement or a determination of your qualification for a loan. Lenders use credit scores to help determine whether or not you are a good candidate for a loan and what interest rate you will pay. However, each lender has specific underwriting standards, so you should not assume that you will receive the same evaluation from each lender. As part of the underwriting process, they will incorporate additional information you provide and may obtain references. In addition, even if you are approved, the terms and conditions of loans vary from lender to lender. The information used to determine your credit score comes from TransUnion, one of the major credit bureaus. Credit reports are a compilation of credit information that is reported to the bureaus by the various lending institutions with which you have accounts. The information contained in your report reflects the latest information provided. If you recently made a payment, opened a new account, or authorized an inquiry, it may not yet be reflected in the credit report you receive. Likewise, it will not be reflected in your credit score. Also, disputed items are not incorporated in the assessment of your credit score. Your credit score will change each time new information is captured in your record. TrueCredit is not connected in any way with Fair, Isaac and Company; the credit score provided here is not a so-called FICO score. The credit scores of TransUnion may not be identical in every respect to any consumer credit scores produced by any other company.