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    Edmundo Daco Jr.

    Credit bureaus determine a credit score almost in the same way. They calculate it based on several factors namely: payment history, total debt and loan, credit history, types of credit, and new credit.

    Payment history amounts to 35%. Payment history tells whether or not you made payments on time on your past loans and debt. It should show that you haven’t missed any payments before. The total amount owed is 30%. Total debt calculates your credit utilization. It is the percentage of the available credit you are using. The lower credit utilization you have, the better your score you’ll have. The ideal credit utilization is less than 20%.

    Credit history counts for 15%t. The length of your credit history matters as well because long credit history means many lenders have trust in you and consider you a less risky borrower. Types of credit are 10%. Types of credit show if you have a variety of credit lines. The more types of credit you have, the better. Lastly, the number of new credit accounts matters as well.  New credit counts for 15%. The more new credits you opened, which means more credit inquiries, the lower your score will be.

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