Get smart about credit: Know what factors affect your credit score

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Get smart about credit: Know what factors affect your credit score

Posted On: October 17, 2017 by Farmers Trust & Savings Bank in: Credit

The way you use credit can affect your ability to borrow money in the future. Using credit responsibly is key to securing a positive credit rating. Get Smart About Credit Day is Thursday, Oct. 19, which makes it an ideal time to learn what factors help determine your credit score. Top 5 factors that affect credit scores According FICO, there are five main factors that can play into determining a final credit score. Some have a larger impact than others, but each area is examined to determine a person’s ability to pay back a loan. Following are the five factors FICO uses to calculate a credit score and the percentage each factor plays in determining the final score. Payment history (35 percent): This is the most important factor in determining your credit score. Showing consistency in paying bills on time is vital to securing a higher credit score as it shows your reliability in paying off a loan or other debt. Credit utilization (30 percent): How you handle debt plays...