Understanding Your Credit Score

September 2020

Those of you that have been reading my monthly newsletters for a while know how often I talk about the importance of taking care of your credit. The options a higher credit score can give you for commercial financing are phenomenal. As I have mentioned in the past it is not just a ‘score’ that comes into play although that is what we will discuss here. It is also a history of long-term accounts, comparable credit, lack of public records (tax liens and past bankruptcies) Credit Bureaus are similar in their philosophies and put almost the same weight in different categories. The reason why your score varies with each individual Bureau is the number of tradelines they each are monitoring. Experian is almost always the toughest bureau to score well with followed by Equifax and then Transunion.

The Six Financial Factors That Affect Your Credit Score:

  1. Payment History – 40%
  2. Credit History – 21%
  3. Total Balances – 11%
  4. Credit Checks – 5%
  5. Available Credit – 3%

It is important to note that although there is much concern regarding “credit hits” you can see that it is not a substantial part of your score. In addition to that, the Agencies have a “14 day window” when someone is searching for a mortgage, personal or commercial loan as they understand that most likely credit is getting hit numerous times but it is just one loan being pursued, not numerous loans. During this period your score for inquiries is affected very little.

Although 3% of your score is “Available Credit” the 80/20 does come into play as all bureaus look at maxed-out cards or credit lines as a sign of struggling to get ahead even when your payment history is good.

Lastly, note the payment history. Paying your bills and not being 30 days delinquent is still the most important part of an excellent credit score at 40% but it is common to think that this area is 100% and that is simply not the case.

I find it valuable to have a credit monitoring company so you know when credit inquires are made as well as just for identity and credit protection. have mentioned in the past the credit monitoring company I use is called Identity IQ. The features are many and I find the nominal subscription fee a necessary expense and well worth the protection and comfort that it offers.

To learn more about Identity IQ click on the following link. You will also have an option to subscribe if you like; I highly recommend it!


Have a very successful month!


Famous Quotes

"I am prepared for the worst, but hope for the best."

Benjamin Disraeli

Did You Know???

Random Facts About Dogs

  1. Dogs noses are wet to help absorb scent chemicals
  2. Newfoundland dogs are the ultimate doggy lifeguards because they have water-resistant coats and webbed feet.
  3. The Beatles song ‘A Day in the Life’ has a frequency only dogs can hear.
  4. A Bloodhound’s sense of smell can be used as evidence in court.
  5. The tallest dog in the world is 44 inches tall.

Just for Laughs!

A business owner decides to take a tour around his business and see how things are going. He goes down to the shipping docks and sees a young man leaning against the wall doing nothing. The owner walks up to the young man and says, "Son, how much do you make a day?"

The guy replies, "150 dollars."

The owner pulls out his wallet, gives him $150, and tells him to get out and never come back.

A few minutes later, the shipping clerk asks the owner, "Have you seen the UPS driver?? I asked him to wait here for me!"

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