Calculating credit scores is done through a tally of all the records obtained from the 3 credit bureaus. Depending on how promptly your lenders submit financial data to these bureaus, the results obtained for each may differ from time to time. That is no cause to worry, however, since most credit reports are valid if the history used spans a minimum of at least 6 months to a year. It is no secret that arriving at a particular credit score number is a process that most lenders would rather pay for FICO especially because of standardization. The advantage of using the FICO score is that a single number is enough to establish how reliable a borrower is in repaying debt as indicated by what score is good credit.
Over a third of the FICO score comes from payments made. Paying your debt on time and in full whenever an installment is due is the discipline that credit institutions seek before extending their facilities. A high credit score means that lenders that have offered you credit in the past have no complaints regarding how promptly and systematically you repay your debt.
The second third of the score is arrived at based on the total amount of credit that lenders owe you. Having a large debt is determined by the percentage of credit money you have used as a fraction of the total available limit. The purpose for which credit is extended is so that you can have money at your disposal when you need it, using up a large portion means that your level of debt is low and it is likely you might be unable to repay any new facilities lowering what is good credit score.
Did you know that the number of times you request for your credit report affects your overall score? This is not a good thing is it reflects in the history because it could indicate that you are too eager to get credit. Desperate borrowers are always a risky lot to offer credit to because the nature of their financial pressure may escalate making it hard for them to repay debt affecting what score is good credit.
Related Source: A Credit Card is not a Substitute for Cash