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Your Credit score is derived from multiple factors. Your Credit score is derived from multiple factors, all with different weightings. For example, your payment history is a key ingredient. A series of late or missed payments can dramatically lower your Credit score, because this component carries a 35 percent weighting in the scoring process.
The total amount owed is another heavily weighted factor. Using up a large percentage of your available credit counts heavily against you. For that reason, you may not want to consolidate all your credit-card debt on one card, nearing the limits. That strategy could make debt easier to pay down, but weighs against you in the scoring process, something you should consider if you're about to seek a mortgage loan.
Credit scoring has long been a behind-the-scenes method that lenders use in determining who should get credit--and what interest rates they should pay. Unlike a Credit Report, which simply tracks your bill-paying habits as reported by your creditors, your Credit score assigns a weighting to other variables in your personal financial history.
The scoring process also looks into the length of your credit history (not much you can do about that if you're just starting out), the mix of credit you're using, and how recently you've taken on more debt.
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