Before discussing the credit score, let's differentiate it from the credit report. The report estimates the creditworthiness of an individual, corporation, or even a country. It is not one number, as is the credit score. It is an evaluation made by credit bureaus of a borrower’s overall credit history. A credit report is also known as an evaluation of a potential borrower's ability to repay debt, prepared by a credit bureau at the request of the lender. Credit ratings are calculated from financial history and current assets and liabilities. For more information, please see:

How a Credit Rating is Determined

Sample Credit Report

Our focus in this brief is the credit score. We were very fortunate to receive permission to present the following information from Graceworks Lutheran Services

Credit Scores

Many lenders base their loan decisions on your credit score. Your credit score comes from a complicated mathematical equation that considers all components of your credit report. Basically, the higher the score, the better credit risk you are. Unfortunately, each creditreporting agency uses its own scoring range, though 300 to 850 seems to be emerging as a consensus. An example of one and why your score matters is shown in the table below.

Scoring Range

  • Above 730 Excellent
  • 700-729 Good
  • 670-699 Lender will take closer look at your file
  • 585-669 Higher risk; you will not be eligible for the best rates and products
  • Below 585 Credit options are limited or not available

Factors that make up your credit score are:

Payment history (35%) Be punctual! Paying your debts late not only costs you a fee but also damages your credit. Late payments, collections, and bankruptcies have the greatest negative effect on your credit score. Bankruptcy will cause the most damage and can stay for up to 10 years on your report. Derogatory public records such as suits, judgments and foreclosures will reduce your score and stay on your report until released by the court.

Outstanding debt (30%) This considers how much you presently owe and if you are overextended. Reducing your balances to below 50% of your credit limits helps improve your creditworthiness and can save you a bundle on interest charges.

Length of credit history (15%) Establish a long history of paying your bills on time and using credit responsibly. You may also want to keep the oldest account on your credit report open in order to lengthen your period of active credit use.

Recent inquiries on your credit report (10%) A large number of inquiries occurred over a short period of time may be interpreted as a sign that you are opening numerous credit accounts due to financial difficulties or overextending yourself by taking on more debt than you can easily repay.

Types of credit in use (10%) Balances on credit cards or loans from finance companies can lower your score. Secured loans such as vehicle loans and mortgages are better.

It is critical that you do everything you can to keep your score as high as possible.

Unfortunately, there is a lot of misinformation out there about what does and doesn’t hurt your score. The best way to get your score up and keep it that way is to pay your bills on time, pay down your debt, and apply for credit only when you need it.

What Affects Your Credit Score

A Credit Score is a numerical representation of your credit worthiness. The majority of lenders use some sort of credit scoring model to help predict what kind of credit risk you may be. The higher your credit score, the less risk the lender associates with making a loan to you.

What Factors Lower Your Credit Score

Payment history - late payments

Credit usage - balances compared to credit limits

Past due accounts - 30/60/90 day late payments

Credit availability - low amount of credit available

Finance accounts - finance company accounts

Collections - are considered a negative and reduce your score

Public records - this includes: bankruptcy, judgments, law suits, evictions, tax liens

What Factors Raise Your Credit Score

Number of accounts - having available credit avenues

Payment history - no late payments

Balance owed - low balance compared to credit limits

Types of accounts - installment accounts vs. revolving accounts

Credit length - length of credit history

High credit limits - indicates good risk

No public records - indicates stability

Disputing Incorrect Information on Your Credit Reports

Must be in writing - state why it is wrong

Documentation - send copies of proof, if possible

Time frame - credit bureau has 30 days to contact credit grantor

Answer to you - credit bureau must send a corrected written report

Increased score - it can take 3 to 12 months to increase score

All bureaus - you must write a separate dispute for each bureau

Credit Reporting Agencies


P O Box 1000

Chester, PA 19022



P O Box 740241

Atlanta, GA 30374



P O Box 2002

Allen, TX 75013


If you have been denied credit within the past 60 days, you are eligible for a free credit bureau report from the agency that supplied the information to your lender. Note that you will be asked for your credit card information; you get a free trial period, but if you don't cancel during that period you will be charged from then on. Contact:

Annual Credit Report Request Service

P. O. Box 105281

Atlanta, GA. 30348-5281


There is a handful of companies launching services that give consumers at least a glimpse at their credit scores free of charge. One that one of our associates found particularly useful is the sites. You may also wish to try or All offer some analysis of the score such as key factors that go into calculating your score, what you can do to improve them and how your credit stacks up against others

We recommend you review your credit report and score at least annually to check for accuracy (1/3 of credit reports contain errors) and to check for identity theft. You should also review your credit report before applying for a major credit purchase such as a home or car.

Credit Counseling

Consumer Credit Counseling Service also offers a personalized credit report review service. You will have the opportunity to schedule a confidential meeting with one of our certified credit counselors who will review your own credit report with you. You will be able to thoroughly examine your credit report and see what it says about you. If there are mistakes in your report, our counselors can advise you on how to correct them. They can also advise you on ways to improve your credit rating.

If you are interested in these services, please call 937-643-2227 or 1-800-377-2432 for more information or to schedule an appointment; or, visit our website at

If you would like to request a Cincinnati SCORE counselor please click here, for a Dayton counselor click here


The information contained in these briefs is for general information only. While we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the information, products, services, or related graphics contained in the briefs Through these briefs you may be able to link to other websites which are not under the control of SCORE therefore the inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them. Any reference from SCORE to a specific commercial product, process or service does not constitute or imply an endorsement by SCORE, SBA, SCORE Chapter 34, SCORE Chapter 107, or the United States Government of the product, process, or service or its producer or provider.

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Credit Score - SCORE 4.39