Mind on My Money:  Black Personal Finance 101

About Your Credit Score

Why Credit Matters
What Is Your Credit Score

You could look at your credit score as a kind of beauty contest for your financial history.  Ranging from 300 (really REALLY ugly) to 850 (Absolutely Stunning) the three digit score generated by your credit file is used by a wide variety of companies to make decisions as to your credit risk and worthiness.

Widely accepted as the industry standard, the FICO Score is the standard tool used by lenders, potential employers and a host of other companies to determine the level of risk they are exposing themselves to if they were to accept you as a customer.  Higher credit scores qualify you for the best interest rates and terms.  Lower credit scores will have you qualified to be shown the express route to the front door.

Who's This FICO Guy, and Why Is He Judging Me

Your FICO score is determined by the Fair Issac Corporation, the company that invented the algorithm that calculates your credit worthiness. 

What's In Your Credit Score

Your Personal Data
  • Your Personal Data
  • Your Name
  • Telephone Number
  • Your Address
  • Your Social Security Number
  • Your Birthdate
  • Your Current Employer
  • Previous Addresses
  • Previous Employers

Your Creditor History
  • A detailed record of your accounts and payments with various financial institutions

  • A record of your balances

  • A Record of your credit limits

  • A record of your debt burden

  • The age of your accounts

Inquiries or Authorized Credit Checks
  • An inquiry for a permissible purpose stays on your report, in most cases, for 24 months
Relevant Public Records and Collections
  • Bankruptcies

  • Judgments

  • Tax liens

  • Collection agency debts
    What's Not In Your Credit Score

  • Your level of education

  • Your medical history

  • Purchases made with cash or check

  • Your gender, national origin, race, or religion

  • Your investments or brokerage accounts

  • Your income

  • Alimony commitments
How Your Score Is Determined
  • 35%.....Payment History Performance

  • 30%.....Level of Indebtedness

  • 15%.....Age of Your Credit History

  • 10% .....Pursuit of New Credit

  • 10%.....Type of Accounts on Your Credit Report (Credit Mix)

next: optimize your credit score

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