Important Credit Score Factors: Negative factors

As you undertake the task of dealing with your finances -- perhaps in anticipation of applying for a loan -- it is necessary for you to have a solid and complete understanding of your credit history, of your credit report and your credit score. It is important for you to have a good understanding of the important credit score factors, a good understanding of what factors play a role in determining your credit score in the first instance.

Through this article, you will be provided with an overview of one of the more important factors that can effect your credit score at this point in time. This article deals with the issue of how negative entries on your credit report will lower your credit score, sometimes dramatically.

Common Negative Factors that Impact a Credit Score

There are a number of common factors that negatively impact a person’s credit score. Some of the more significant negative factors that impact a credit score include:

-- late payment

-- non-payment

-- too much available credit

-- high balances on revolving credit accounts

-- judgments

-- accounts in collection.

The FICO Credit Score Formula

The FICO credit score formula itself is a proprietary secret. However, it is generally known that these factors that have just been set forth in this article are the factors that are taken into consideration when it comes to the computation of a credit score. Therefore, it is very important for a consumer to keep these factors in line, keep accounts current and up to date and not overdue when it comes to obtaining credit accounts.

Where Consumers Fall

When contemplating negative factors that impact a credit score, it is also important to understand where other people stand when it comes to credit score related issues.

The general breakdown of the credit score bell curve and the corresponding total delinquency rate (for each subsection of scores) looks something like this:

For More Information on Important Credit Score Factors

If you would like some more information about important credit score factors after reading this article, you should keep in mind that there are a number of helpful resources available to you in this day and age. The Internet and World Wide Web is a wonderful resource when it comes to seeking and finding more information about important credit score factors. Moreover, in the brick and mortar world, there are a number of books now on the market that can now assist you in better understanding important credit score factors. Once again, as has been mentioned, it is vital that you understand and deal with negative factors that impact your credit score and your financial future.