How is your credit score calculated and why is it important?

For free real time breaking news alerts sent straight to your inbox sign up to our breaking news emails Sign up to our free breaking news emails Sign up to our free breaking news emails SIGN UP I would like to be emailed about offers, events and updates from The Independent. "It might mean that you’re paying out more money over the lifetime of a loan every single month.” HOW IS MY CREDIT SCORE CALCULATED? Since you don’t know which agency your lender is going to use to check your credit score, McCreary also recommends that you check all three of them before requesting a large amount of credit. Here are the factors that are frequently used to calculate your credit score: — Bill payment history — Length of credit history — Current unpaid debt — How much of your available credit you’re using — New credit requests — If you have had debt sent to collection, foreclosure, or a bankruptcy One thing that doesn’t affect your credit score is how much money you make, said McCreary. Soft inquiries, where you want to know your credit score, do not affect your score and it’s a good habit to check your credit often to make sure it’s accurate.