Understanding Credit Scores
Many people get into financial trouble because they do not fully understand their credit scores and what they mean. Your credit score, also called your FICO score, is a specific number ranging from 300 to 850 that reflects your ability to pay back loans and credit. The higher your number, the more likely you are to receive a loan because lenders believe you will be more likely to successfully repay the loan.
A good credit score is 720 or higher. At this number, lenders typically believe that it is safe to loan money to you, and they are more likely to give you a loan and reduce your interest rates. If you have questions about credit scores, or if you are experiencing financial difficulties, contact the Boca Raton bankruptcy attorneys of Eric N. Klein & Associates, P.A., at 561-353-2800.
Components of Your Credit Score
Most people are unaware of how their credit score is calculated. The information used to determine your credit score comes from your credit report and is compared to millions of other people’s information. Five categories determine how your credit score is calculated:
- The biggest section (35%) of your credit score is based on payment history (how often you paid bills on time).
- 30% of your credit score is determined by your total indebtedness (all of the debt you have accumulated).
- 15% of your credit score is based on the length of your credit history.
- 10% of your score is based on the mix of credit you are using (your mix of credit cards and loans).
- The remaining 10% is based on new credit and account requests.
Contact Us
Understanding your credit score is a crucial component of being financially stable. The knowledgeable, experienced, and dedicated lawyers at Eric N. Klein & Associates, P.A., are prepared to discuss matters related to your credit score with you. If you would like more information about credit scores and debt, please contact our Boca Raton bankruptcy lawyers at 561-353-2800.
