Credit scoring models may differ between creditors and for different types of credit. Typically, these models evaluate the following information in your credit report:

Do you pay your bills on time?

Your payment history is important. Paying bills late, declaring bankruptcy, or having an account referred to a collection agency are things that can hurt your credit score.

Do you have outstanding debt?

Consider the amount of debt you have and compare it to your credit limits. If the amount that you owe is close to your limit, it will likely hurt your credit score. So, it's important never to max-out your cards or take on more debt than you can pay back.

What is the length of your credit history?

Your credit history tells your story, it's a track record that you've established over time. If you have little or no credit history, it could affect your score. Other factors like making your payments on time and keeping a low balance on your credit accounts can help your credit score.

How much new credit do you have?

Applying for too many new accounts can have a negative impact on your score. Scoring models will examine inquiries on your credit report when you apply for credit. However, not all inquiries are counted. For instance, inquiries made by creditors monitoring your account or generating prescreened credit offers are not counted.

How many credit accounts do you have?

While it's good to have established credit accounts, having too many may hurt your score.

What types of credit accounts do you have?

Some credit scoring models will look at the type of credit accounts you have. Under some models, loans from finance companies may negatively impact your score.

To improve your credit score, you should:

• Always pay your bills on time
• Pay down outstanding balances
• Not take on new debt unless you really need to