Nursing students Tashia Woods and Erica Lee fill out CitiBankCredit Card applications. Although Woods and Lee said they wereonly after the free T-shirts, applying for credit when you don'treally need it can adversely affect your credit score, according tothe Federal Trade Commission. In addition to the number of timesyou request credit, the following are components in tabulating yourcredit score:
When deciding whether to give you credit and at what rate,lenders use your credit score (also known as your FICO score),which is made up of the following components:
TRACK RECORD
Track record includes timeliness of payments on accounts,including credit cards, store accounts, installment loans andmortgages. Recent late or missed payments hurt your score more.
Financial problems -- such as bankruptcies, foreclosures, liensand judgments -- are also taken into consideration. Pay bills ontime to improve your score. If you are behind, get and stay currentor see a counselor. Track record makes up 35 percent of your creditscore.
AMOUNTS OWED --This is the total owed on accounts, howmuch of the credit line is used and how many accounts havebalances.
To improve your score, keep balances on credit cards and otherrevolving credit low.
Amounts owed makes up 30 percent of the FICO score.
CREDIT HISTORY -- Your credit history takes into accounthow long your credit accounts have been established and how long ithas been since you used them.
If you're new to managing credit, don't open too many accountstoo quickly.
Credit history makes up 15 percent of your credit score.
NEW DEBT -- How many new accounts you have and how manyrequests you've made are taken into account. Open accounts only asneeded. New debt is 10 percent of your credit score.
HEALTHY MIX -- This section considers the types ofaccounts and how many of each you have.
Aim for a reasonable number of accounts. Well-managed credittends to make you a good risk for lenders.
This makes up 10 percent of the credit score.
