Just how is credit score determined in the U.S? Here’s what you need to know

A good credit score is very important in any financial decision. Payments and invoices contain many important aspects that must be considered when calculating your score. Let’s discuss these aspects and how they affect your credit score.

How Does Credit Score Work?

Lenders charge interest on subprime mortgages at higher rates than normal mortgages to compensate for greater risk.

Conversely, a credit score of 700 or higher is generally considered good and less risky. This enables the borrower to receive a lower interest rate and pay less interest over the life of the loan. Results above 800 are considered outstanding. Each lender defines its own credit score range, but the average FICO score range is:

How to Determine a Credit Score?

The following is a general analysis of the 5 factors that credit score models consider.

Payment History

Credit Utilization Rate (CUR)

Ideally, your financial planner says you should keep your CUR below 30% and pay your credit card fees in full on time.

Credit Period

Length of Credit History

The length of your credit history, depending on how long each account was opened and your credit balance, represents different types of accounts, including mortgages, credit cards, car loans, and more. 

The score is low, but you shouldn’t use multiple accounts at once to improve.

how is credit score determined in the US

Number of Credit Accounts

Having another type of credit (guaranteed or unsecured) can lead to a higher credit rating.

Final Verdict

Try recovering your credit score with Credit Repair Today. Credit Repair Today is an authorized credit repair consultancy that provides credit score assistance across the United States.

You can also visit our office in Palm Coast, Florida. We can talk face to face to help improve your credit score starting today.