How is a credit score calculated?
A credit score looks at each account on your credit report and processes it through an algorithm that determines whether the account represents the likelihood for repayment or default. Details that factor into the score include on-time or late payments, how late payments are, how many accounts are open, what the proportion of balances to credit limits are, whether there are collections, bankruptcies, judgments, liens or other derogatory reports. The score is considered a snapshot at a specific moment in time. Scores change with new actions and with the passage of time. The farther in the past derogatory information occurs, the less impact it has on a credit score.
