Your credit score is derived from the information in your credit report and provides a means to rate your ability to pay back a loan. The credit bureaus each have their own algorithm to develop your score; however, the scoring models of each credit bureau have been coordinated to provide consistent scores.

More than thirty individual factors are considered when calculating your credit score, but they all fall in to the five main categories listed below. The first two categories account for about two thirds of your score with the final three categories comprising the final third of your score.

Payment History � your payment record accounts for roughly one third of your credit score. Late payments, bankruptcies, accounts in collection are all considered. Time does help reduce the negative effects of missing a payment, so it is never too late to begin improving your payment history.

Amount Owed � the total amount of your debt, how many accounts are open, the ratio of debt to open credit, are considered in this category. It counts for just under a third of your score.

Duration of Credit History � How long has your oldest credit account been active? A long credit history shows stability.

Recent credit � How many new applications for credit have been reported recently? Too much new credit activity raises a flag with creditors.

Types of credit in use �credit cards, installment loans, mortgage, etc. The types of credit you use give creditors clues to your credit worthiness.