March 19, 2014
What is the #1 criteria used in created your credit score? Why care?
What is the #1 criteria used in created your credit score? Why care?
The top factor in determining your credit score is timeliness of making payments.
The timeline is a major factor, how long you had the credit that is on your credit score, such as if you had a credit card for 20 years compared to if you only had it for a year this is refereed to as your credit history. Making payment on time is how you build your credit. Also how much of your credit limit you use out of your total makes an impact on your credit score.
Many factors go into the credit score. The #1 factor is as Karen stated, paying on time. It holds more sway than any other factor, which means it is critical to do month after month and year after year. This one factor can save you thousands of dollars over your lifetime based on the interest rate you pay on loans you take out from a bank or credit union.
The mortgage loan is a very good example. Paying 3.5% on a $200,000 vs. 5% will equate to many thousands of dollars as the years roll along.