You input information about your credit history and are given a score or range of scores that fit your profile. Credit score calculators are great tools to help you learn what to expect when applying for a new credit account. Knowing your score means you will know what interest rates are fair. That can save you a lot of money. Here is a guide to using a credit calculator.
Credit Score Formula
Before trying to calculate your credit score it is important to learn how that number is determined. FICO scores are calculated through the information on your credit report. About the 35% of your score comes from your payment history. This is listed under each account. Late payments lower your score. If your account gets to the point of 120 days delinquent your score will take a massive hit. 30% of your credit score comes from your debt to credit ratio. This is also called utilization. While installment accounts do have an impact on your score, it is revolving accounts that make up the bulk of this 30%. The closer your credit balance is to your credit limit the lower your credit score will be. The length of your credit history accounts for 15% of the score. This is computed by calculating the average age of all accounts. Opening a new account will lower this number and consequently lower your score. The types of credit you have account for 10%. Your credit report should have a mix of installment and revolving accounts. If you don’t have any credit cards your score will suffer. The last 10% comes from the credit inquiries you have. Inquiries impact your score for up to two years. It is important to know that recent negative impact your score more than older negatives. If you have a late payment from four years ago it won’t hurt you nearly as much as one from a year ago.