So, you just used the WilliamPaid Credit Estimator and received your estimated score by answering six basic questions. Or, maybe someone asked you what your credit score was and you have no idea. In either case, you may have a basic understanding of what a credit score is and what it is used for, but you may be wondering how it is determined. Here’s the skinny.

A credit score is a calculated number that is used as shorthand for all the credit-related information that is relevant to you. Each of the three major credit bureaus - Equifax, Experian and TransUnion - calculates a score based upon a wide variety of information they each collect from companies that you do business with or from whom you borrowed money. Even though they may have different inputs, each company scores their data using the widely-known FICO model that was developed in the 1980s. You are entitled to receive a free annual credit report from each bureau.

The information used to determine your score falls into five primary categories. Each category, though, is not weighted equally, but is generally given the weighting in parenthesis.

• Your payment history (35%)
• The amounts of money you owe compared to your available credit (30%)
• How long you’ve been making payments (your credit history length) (15%)
• How often you apply for new credit (10%)
• The different types of credit accounts that you use (10%)

Using the FICO model, the score - along with the information gathered and used to calculate it - is then included in your full credit report.

Your score is based on recent information. To ensure that enough current information is considered in your credit score, the bureaus mandate that, to calculate your score, your credit report must contain at least one account that has been open for six months or more and one account that has been updated in the last six months.

It’s important, over time, to develop a broad range or information sources from which your score can be calculated. This will help ensure that one piece of information - positive or negative - will never tip the scales too much. Your score takes into account both positive and negative information in your credit report. So, while late payments will lower your score, establishing or re-establishing a good, on-time payment track record will tend to raise your score.

While credit scores are important, lenders review many other pieces of information when making decisions about your credit. Your income, how long you’ve been at your present job and the kind of credit you are requesting will all be considered. Your score takes into account both the positive and negative information in your credit report.

Keep in mind that you can positively impact your credit score without going into debt. Using WilliamPaid’s Rent Pay service will ensure that you are getting credit for your largest monthly payment - rent - which isn’t included in your traditional credit score. And, you can really bolster your credit score by using WIlliamPaid’s Bill Verification, which will verify other non-traditional accounts that you may have paid, such as utilities, mobile phone or cable, and report your payments to a credit bureau.