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Keeping up with your credit score

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Identity theft and data breaches could impact your credit score. But what really goes into making up your credit score?

There are many factors that play into that credit score. So here's what you should be doing to keep that number up.  

A credit score compilation of credit accounts and the history that goes with them. There is a complicated mathematical formula that boils down your finances to a single number. With that in mind, let's list the top five things that go into giving you a good or a bad number.

Number 1: Your payment history.  It's 35 percent of your score. You pay on time you get a higher score.

Number 2: 30 percent of your credit score is the amount of debt you carry.  Do you max out on your credit cards? Let's say you have a $5000 limit, your credit will do better if you keep that balance lower rather than higher.

Number 3: The length of your credit history is 15 percent of your score. How long you've had a credit history on record?

Number 4: Ten percent of the score is based on your type of accounts. A major credit card is going to look a whole lot better than a payday loan.

Number 5: 10 percent of your score is inquiries. The more companies you have poking into your credit rating the more dings it will get. So, think through signing up for that department store card if you will be using your credit score to get some kind of a loan in the near future.

Remember to ask for a free copy of your credit report once a year from all three big credit reporting agencies.  It pays to stay on top of it so that if something on there is wrong, you can fix it sooner rather than later. A higher credit score puts you in a better position to get lower interest rates on loans or credit cards.

Links to credit agencies:

www.experian.com

www.equifax.com

www.transunion.com

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