Pretty much every major financial decision you make is linked to your credit score. That's the reason it is crucial to understand the credit report scale, how it is calculated, and what's regarded as a good credit score.
Probably the most commonly used credit report scale is FICO score. FICO score is a three digit number that ranges from 300 to 850. The higher the amount, the higher the credit rating. Your ultimate goal will be to get the score of yours into 720-850 range. Scores higher than 725 are considered great while those which are under 600 are considered bad. The nice thing is the fact that a purchaser with a FICO score of 722 can easily get just as great an interest rate on an automobile loan as someone with 848. That's true for each and every credit score range.

The credit score ranges are around as follows:

The credit score ranges are around as follows:

o 720-850: Best Credit or Prime Credit
o 700-719: Good Credit
o 675-699: Marginal Credit
o 620-674: Sub-Prime Credit
o 560 619: Poor Credit
o 480-559: Very bad Credit
Thus, just how is your score calculated?
Thus, just how will be your score calculated?

The FICO score of yours consists of these 5 major components:
1. Paying punctually (thirty five %): This is the most significant component of the credit score of yours. Your payment history includes the number of overdue payments, the amounts of theirs, and if the accounts were repaid as agreed. The greater problems, the lower the score.
1. Paying punctually (35%):
2. Amount owed and proportion of the credit lines used (also known as credit-to-debt ratio) (thirty %). This particular aspect includes the entire amount of the debt of yours by account sort (mortgage, installment, revolving, etc.), the number of profiles by which you're carrying a balance, thus the proportion of the credit lines used. For credit cards, the proportion of credit lines used is exactly what you presently owe in relation to the credit limit of yours. In case of installment loans, this particular total is what is remaining to be paid out in relation to the first volume of the mortgage. The lower the ratio of everything you owe to your credit offered, the better. And so having credit cards with no balance or low balance will raise the score of yours.
2. Amount owed and proportion of the credit repair service ca [recommended] lines used (also recognized as credit-to-debt ratio) (thirty %).
3. Length of your credit history (15%):
4. The mix of credit accounts used (10%):
5. The amount of new inquiries & newly opened accounts (10%):