Expect Your Credit Score to Increase by 30 Points this Month
With some of the largest credit reporting agencies deciding to exclude tax liens from credit scores, 11 percent of the population is about to benefit from this change. It could result in their credit score increasing by about 30 points. So how do you calculate your credit score? The FICO credit score depends on five major points.
Types of Credit Cards used
10 % of your credit score depending on the type of credit cards that you use.
35% of your credit score depends on your payment history. For example, the time taken to repay bills and if there are outstanding dues.
Your FICO credit score also depends on new credit cards that you have obtained.
Use of Credit Cards
A comparison of your limits and how much you owe on your cards are also calculated on these credit scores. If you have a large number of cards, it may prove to be quite useful in such scenarios.
It is essential to obtain a good credit score from FICO which is generally above 760. Credit scores need to be high as it is the most important factor that determines your lifestyle. A good credit report is highly indispensable as it helps to calculate interest rates for credit cards, mortgages, car loans and so forth. It also helps to determine if you are eligible for a loan or not.
According to the LexisNexis Risk solution, 11 percent of the population will benefit from the latest changes in the credit file. According to the new standards, all tax liens will be removed from the credit reports. Most of the consumers will experience a higher credit score by the end of April 2018.