What Determines Your Credit Score?

 What Determines Your Credit Score

Your credit score is the number that lenders use to figure out the risk of lending money to you. If you're looking to finance a car, credit score can be all the difference between driving away in the vehicle of your dreams and being left in the dust. What exactly determines a credit score? Let's take a closer look.


What Determines Your Credit Score

1. Payment History - This is generally the biggest factor in calculating your credit score. Lenders look to see if you consistently pay your bills on time, if you've had any accounts go to collections, or if you've had any charge-offs, bankruptcies, foreclosures, etc.

2. Amounts Owed - The next factor in determining your credit score is how much you owe. How much total available credit you have it looked at as well as how much you owe on other types of accounts like mortgage, auto loans, and credit cards.

3. Length of Credit History - Your credit score takes into account how long you have been using credit. A longer history is generally helpful as long as it's not harmed by numerous late payments and other negative items.

4. New Credit - Another factor in determining your credit score is how many new accounts you have, how many you have applied for recently, and when the last time you opened an account was.

5. Types of Credit in Use - Last, your credit score is affected by the types of credit you have used, such as credit cards, store cars, loans and mortgages. It looks at how many you have as well.

Although having a great credit score is better when looking to finance anything, don't let it scare you away from looking if you don't have a great one, or if you don't have credit history at all. At Mountaineer Ford, we work with all types of situations. Great credit, bad credit, and even no credit; there's an option for you and we'll help you figure it out.


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