Tips on How to Calculate Your Approximate Credit Score
The information about how exactly a credit score is calculated by credit reporting agencies is held proprietary. We know only its basic principle: any personal credit history is generated through its comparison to a general average credit history. There are, however, a few tips that you can use to calculate the range of score you may hold.
Before you start calculating your score, there are a few things you should be aware of:
- The typical range of credit scores is 300 to 850. Scores under 650 are considered low, and scores above 750 are high.
- There are three major reporting agencies: TransUnion, Equifax and Experian. Since some creditors report only to one of them, the information in your report may vary depending on the agency you have requested it from.
- If your credit score is lower than you think it should be, check your report carefully to make sure it doesn’t contain any errors or theft related activities.
- All the major slip-ups, such as bankruptcies, will continue affecting your credit score for 7-10 years, even if you’ve been maintaining a good score ever after.
And here are some tips to help you calculate the approximate range of your credit score:
Tip 1. Analyze the negative issues on your credit report: such issues as bankruptcies and delinquent accounts affect about 30% of the credit score. Your score will be the lower the more negative issues there are on your credit report.
Tip 2. Analyze the payment history section of your account balance with a list of your past payments going back up to 2 years. This information affects up to 35% of your credit score and may have an impact on it in case you have a history of repeated late payments.
Tip 3. Analyze the good standing section: the positive information there may balance some of the negative issues in your credit history. The positive issues in this section may pull back some of the scores you lost to the negative ones.
Tip 4. Applying for new credit from many sources at once will affect the score negatively, taking up to 10% of it.
Tip 5. With all this information at hand, calculate the score while taking the duration of your credit into account. Compare your history to a perfect one (rated 850). This way you will get the range your score is most likely to fall into.
