If you're a little confused about your credit track record and credit rating there are some stuff you ought to know to help you understand them better. To start you will find three major credit rating agencies within the U.S. and many smaller, localized ones. Each of the three major bureaus has different reporting habits as well as your score will vary from one towards the other. Items which are reported, or not reported, will also differ on each one. This is why it is so important that you check each report for inaccuracies.
Your credit score is dependant on several factors. One third of the report depends in your payment history alone. Late payments, non payments and credit collection agencies dramatically reduce your score in this area. One third of the report depends in your debt to available credit ratio. If you have 5 credit cards that are maxed towards the limit you will have a lower score than someone with two cards that have only a few hundred charged in it. Credit bureaus assume that someone who charges up to their limit is really a higher credit risk.
The last third of the report is dependant on several small factors. Home ownership provides you with a higher score than renting and if you have several previous addresses this can count against you also. Requests for credit reflect in this area as well as payments on secured credit or medical bills.
Every financial transaction you are making will have an effect on your credit rating - bad or good. That's the reason it's so important to review your credit history once, preferably twice, annually for mistakes or inaccurate reporting. With this thought, check your report often, pay your bills promptly and keep the charges below the limit and you should don't have any issues with your credit report or score.
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