A credit report can sometimes be more confusing than helpful because of the amount of
information it contains. But a free credit rating report can clear up the confusion by giving you
a single number scoring of your credit. Credit ratings let creditors easily compare one person's
credit report with another. And with your free credit rating report, you'll be able to see where
your credit ranks compared to the rest of the country.
A free credit rating report is a formula derived from looking at hundreds of thousands
of credit reports. The formula weights the factors most important in predicting how well you'll
pay your bills and their combination is the credit rating. The factors come from five areas of
your credit report:
Credit History
Paying your bills on time is the most important thing you can do to maintain good credit and
a free credit rating report places major emphasis on it. The more serious and more recent a
bill-paying problem is, the more negatively it's rated.
Debt Owed
The free credit rating report takes into account both your total debt and your debt in relation
to your credit limits. The closer you are to the limits, the lower your score will be. To improve
your score, you need to pay down any high balance accounts and lower your overall debt.
Credit History Length
A long credit history and a high average age for your accounts are positive factors in your
free credit rating report. Every new account lowers the average age of your accounts, so don't
open several new ones at once.
New Accounts
A credit report with several recent new accounts concerns creditors who think you'll overextend
yourself. Also, if there are numerous recent credit report requests without new accounts being
opened, it will be seen as a sign of poor credit. And either of these will lower the score in your
free credit rating report.
Types of Accounts
Usually a mixture of accounts is scored more positively than having just one kind of credit
account. So a credit card account and a car loan may be rated better in a free credit rating
report than just two credit card accounts. Also the type of credit is considered, so that having
two credit card accounts could score better than two finance company accounts.
To get your free credit rating report, free credit report and free 30 days of credit
monitoring, please go to
free instant credit reports.
