1. What is a Credit Score?

A credit score is a numerical representation of your creditworthiness, ranging from 300 to 850. It's used by lenders to evaluate the risk of lending you money or extending credit.

2. How is Credit Score Calculated?

The calculator uses the following weighted factors:

Where:

• Payment History (35%): Your record of on-time payments
• Credit Utilization (30%): How much credit you're using compared to your limits
• Credit Age (15%): Length of your credit history
• Credit Mix (10%): Variety of credit types (cards, loans, etc.)
• Inquiries (10%): Recent applications for new credit

3. Importance of Credit Score

Details: Your credit score affects loan approvals, interest rates, rental applications, and sometimes even employment opportunities. Higher scores mean better terms.

4. Using the Calculator

Tips: Enter accurate information about your credit profile. For payment history and credit mix, enter percentages (0-100). Credit utilization should reflect your current ratio.

5. Frequently Asked Questions (FAQ)

Q1: What's a good credit score?
A: Generally, 670-739 is good, 740-799 is very good, and 800+ is excellent.

Q2: How often should I check my credit score?
A: At least once a year, but preferably every 3-4 months if you're actively working to improve it.

Q3: How long do negative items stay on my report?
A: Most negative information remains for 7 years, bankruptcies for 10 years.

Q4: Does checking my score lower it?
A: Checking your own score results in a "soft inquiry" which doesn't affect your score.

Q5: How can I improve my score quickly?
A: Pay down balances, make all payments on time, and avoid new credit applications.