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What factors are used to determine my credit score?

Your credit score is important for a number of reasons. It is what people and companies will base many decisions on throughout your life, including whether you can rent or own a home, buy a car, take out a loan or possibly even get a job. Filing for bankruptcy in Tennessee is certain to bring your credit score down, at least for a few years. However, there are several things that go into deciding your score and therefore, understanding what those factors are may help you keep it as high as you are able.

First, your score is partly based on the types of debts that you carry, explains If you have a diverse mix of payments, it works in your favor. How many times you apply for new credit is also a factor. A number of credit applications submitted in a short time span could be a red flag.

Another important factor is how much of your credit you are using. Ideally, you want to aim for less than 20 percent of your available spending limits. The credit scores of people who carry high balances or who max out their credit cards will most likely suffer. How long you have had each credit account is important, as well. Credit accounts with a long history and with steady use will be looked upon most favorably.

Finally, the most important factor that goes into computing your credit score is your payment history. It is important to note that a poor credit card payment history will not be as damaging as a poor history of paying a loan like a mortgage. However, making payments on time will go a long way toward ensuring that your credit score remains high. This is not intended as legal advice and is provided as general information on this topic only.

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Rothschild & Ausbrooks, PLLC
1222 16th Avenue South, Suite 12
Nashville, TN 37212

Toll Free: 866-656-8909
Phone: 615-866-2265
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