Demystifying Your Credit Score

At Northpointe Bank Team 101, we want to help you understand not only how a credit score works, buy also how you can be proactive in effort to improve your score. Here is some helpful information to demystify your credit score.

What is a Credit Score?

Use of a statistical model to objectively evaluate your creditworthiness based on all the credit information available. The score is a snapshot of your credit profile at particular point in time.

A Credit Score:

  • Quickly and precisely assesses risk for loan repayment
  • Can have varied ranges of scores depending upon the type of score used, ranging from 400 – 850
  • Is sometimes referred to as a FICO® score, the most common score used by the bureaus

The Five Factors that make up Credit Scores

35% – Payment history

30% – Amounts owed

15% – Length of credit history

10% – New credit accounts

10% – Types of credit used

Improving your Credit Score

  • Only apply for credit when needed
  • Always pay bills on time
  • Keep balances low on credit cards
  • Pay off debt rather than moving it around
  • Re-establish credit if there have been problems in the past; opening new accounts responsibly will improve credit scores over time

How Inquiries Impact the Score

  • Inquiries made by you or your employer through a repository
  • Multiple inquiries by mortgage companies and auto dealers made within a 30 day period are counted as ONE inquiry
  • Credit inquiries remain on the credit report for two years, but impact the credit score for only one year

Staying Proactive

  • Focus on methods of preventing problems
  • Check your Credit Report annually using tools such as
  • Setup payment reminders/enroll in automatic payments
  • Apply for new credit accounts only as needed
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