Credit scores can be calculated in a variety of ways, with each model employing its own unique set of criteria. Even though many scoring systems use the same factors, they are usually divided into the following groups:

Payment history:

Your payment record is a record of when you have paid debts and whether or not you have paid them on time.

Total amounts due:

How much you have borrowed and how much of your available credit you are using

Average credit age:

The average age of all your accounts as well as the ages of your oldest and newest accounts will make up your credit history’s age.

 Recent activity:

Your recent activity consists of the number of applications you have submitted and accounts you have opened in the recent past.

Various credit accounts:

Whether or not you have worked with various accounts before, such as loans and credit cards.

Your credit score is purely based on the information that is found in your credit report; nevertheless, certain sorts of data can have either a favorable or negative impact on your score. It is possible for a single activity, such as paying off a balance on a credit card or making a payment on a loan, to have opposing effects on a person’s overall credit score. Even if you close an account, it can continue to have an impact on your credit score for up to two years after the account has been closed. A loan or credit card account that has been paid off in full or closed without a balance can be on your credit report for up to ten years after it has been paid off or closed. According to the Federal Fair Credit Reporting Act, the majority of negative information can remain on your credit report for up to seven years; however, its influence may decrease over the course of time.

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