The Scoop on Credit Scores

The Scoop on Credit. Scores 10 We demystify the numbers that determine your creditworthiness WHY DO CREDIT SCORES DIFFER? You don't have one single credit score. Dozens of models are used to determine your score; each one varying by bureau, reporting agency, model type and ſender. FICO VantageScore The most widely used credit score among lenders, the FICO score is used to help companies determine your credit risk. The second most commonly used credit score, the VantageScore predicts how likely you are to pay your credit obligations on time each month. 300 850 300 850 National National 689 681 average average You don't have just one FICO score Each of the 3 major credit bureaus calculates their own score using FICO software TransUnion Experian 520 630 530 630 740 430 730 300 850 330 830 BAD GOOD BAD GOOD Equifax Each of the bureaus uses the same formula to calculate VantageScore, but your Score may still vary based on the information each 510 625 395 740 bureau has. 280 850 BAD GOOD ll You can have 3 different FICO & VantageScores at each of the 3 bureaus. Married couples have separate FICO scores. You need to have a credit history before you have a credit score. WHAT'S IN YOUR CREDIT SCORE? FICO score VantageScore 30% 10% 9% 1% Types of credit use Depth of credit Available credit Amounts owed 9% Credit balances 30% Recent credit 23% 35°% 15% 10% Credit utilization 28% Payment history Payment history New credit Length of credit history WHAT'S NOT IN YOUR CREDIT SCORE? U.S. law prohibits credit scores from considering your age, race, religion and national origin among other things. HOW LONG DO NEGATIVE ITEMS REMAIN ON YOUR CREDIT SCORE? Up to 10 years Bankruptcy Charge-off accounts Closed accounts Collection accounts Up to 7 years Judgments Late payments Tax liens Inquiries/Credit checks Up to 2 years TOP 5 THINGS TO AVOID THAT MAY DAMAGE YOUR CREDIT Do not miss payments. Even if you have to pay only the minimum balance, do not miss payments to lenders. Do not overspend using credit. Avoid using all of the credit available to you. Try to stay under 35% of your available credit limit. Think twice before closing credit cards that have a positive credit history. This can potentially shorten your credit history. Do not apply for credit too frequently. When a lender or business checks your credit, it causes a hard inquiry and a slight ding to your credit score. Do not rely only on credit cards or one form of credit to build your credit history. The same is true for mortgages, student loans, car loans, etc. GO TO NATIONWIDEBANK.COM FOR MORE INFORMATION Sources Nationwide http://www.vantagescore.com/images/resources/S2.0wp_FINAL_4.8.11.pdf https://www.creditkarma.com/article/vantageScore http://www.credit.com/credit-scores/what-is-the-average-credit-score/ http://www.myfico.com/crediteducation/creditscores.aspx http://www.experian.com/live-credit-smart/state-of-credit-2013.html http://www.TransUnion.com/personal-credit/credit-issues-bad-credit/ what-affects-your-credit-score.page http://www.myfico.com/CreditEducation/WhatsIn YourScore.aspx tu TransUnion. BKM-2943AO (2/15) %24 %24