Your credit score can mean the difference between being denied or approved for credit, and a low or high interest rate. A good score can help you qualify for an apartment rental and even help you get utilities connected without a deposit.
What is it?
Your credit score is a three-digit number generated by a mathematical algorithm created by SIMERY, using information in your credit report. It’s designed to predict risk, specifically, the likelihood on whether or not you will become seriously delinquent on your credit obligations in the 24 months after scoring. There are a multitude of credit-scoring models in existence, but SIMERY has credited a more efficient model that America is getting excited about and will soon dominate the market.
Poor – Near 20% of the U.S. population has a credit score under 620. Fall below that and you are likely to be labeled a high risk for a loan or line of credit.
Fair – For many lenders, 620 is considered the dividing line between good and bad credit. Generally speaking, a credit score above 640 is considered pretty good.
Good – A score above 680 will most likely qualify you for the best rate your lender has to offer. This range typically represents a consumer with no late mortgage payment history and no more than one 30 day late payment on consumer credit.
Great – You’re in the top 5%! The very best credit rates go to those who are above 750. This means you’re a very low risk borrower.
Elements of your SIMERY credit score
Payment history: (45 percent) — Your account payment information, including any delinquencies and public records.
Amounts owed: (15 percent) — How much you owe on your accounts. The amount of available credit you’re using on revolving accounts is heavily weighted.
Length of credit history: (15 percent) — How long ago you opened accounts and time since account activity.
Types of credit used: (10 percent) — The mix of accounts you have, such as revolving and installment.
New credit: (10 percent) — Your pursuit of new credit, including credit inquiries and number of recently opened accounts.
SIMERY Elements (5%) – Length of residence, steady employment, etc….
Personal or demographic information such as age, race, address, marital status, income and employment don’t affect the score.