You may have worried many times about what your score is, and how to keep it at the optimal level. Do you however, know how the credit bureaus interpret or calculate your score? It's very important that you know about such details when you want to repair your credit in a hurry.

Here is a glimpse into how the credit bureaus mark your credit score.

Regular Payment Is Most Important

As much as 35% of your credit score is allotted to your payment history. This is why it's extremely important for you to pay your bills on time. Every time you are late with a payment, you are hurting your score. Unfortunately, this damage cannot be undone even after you successfully repay the loan. This is why the first and most important thing about keeping your score up is to pay your bills on time.

The Indebtedness Level

The next important thing is how much you owe; 30% of the score is allocated to this aspect. There are two important facets here: (1) the amount of your overall debts, and (2) how much credit power you are using. For one, if your total debts repayment amount exceeds 30% of your income, you are trading on thin ice.

In the second case, say – if you are maxing out all your credit cards and also have 2 - 3 other loans, it looks like you are about to overextend yourself. This is something that the credit bureaus and creditors will not find desirable.

The Length of Your Credit History

This is something that you often cannot do much about. Your credit history accounts for 15% of your score. The creditors love to see a long period of history, because that gives them a better idea of what your financial habits are. You cannot make your credit history any older (or younger) than it is. However, you can try to keep it as flawless as possible. The credit bureaus and creditors like to see very little deviation in payments.

The Rate of Opening New Credit

This is earmarked as 10% of the score. One other thing that creditors and credit bureaus treat as a flashing red light is opening too many accounts at the same time. This will be seen as a negative trait even if you pay all your bills on time and carry minimum balances. Your score will also be hurt if you are changing credit card providers too often. This is interpreted a you being desperate to borrow, which does not throw a healthy light on your financial status.

Types of Credit You Have

This accounts for another 10% of your credit. There are two types of credit – (1) open-ended (i.e. "revolving") credit, which does not come with a fixed number of payments (such as credit cards), (2) and installment loans, which will be closed when the whole amount due is repaid. Creditors need to see that you handle both types of loans with responsibility and maturity.

Now, that you know how your score is calculated you will find it easier to improve on it. Whatever your financial past is, once you make up your mind to be steady and put this resolution in practice, your score will reflect it.

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