Credit Reporting: How It Works | TransUnion

Get your credit score at http://www.transunion.com

TransUnion is committed to helping you understand the role credit plays in your life, how day-to-day decisions influence your credit rating and how you can access and use credit to achieve your own goals.

Here are some of the factors the basic credit scoring formula takes into account:

Payment history - A good record of on-time payments will help your credit.
Outstanding debt - High balances in relation to your credit limits can harm your credit. Aim for balances under 35%.
Credit account history -- An established credit history makes you a less risky borrower. Think twice before closing old accounts before a loan application.
Recent inquiries - When a lender or business checks your credit, it causes a hard inquiry and a slight ding to your credit score. Apply for new credit in moderation.
Types of credit - A healthy credit profile has a balanced mix of credit accounts and loans.

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It's all around you, behind the purchase of homes, cars, electronics, and countless other items. There's a system in place that enables the millions of credit based transactions that occur everyday to be conducted quickly and efficiently.

When you apply for a credit card or a loan, the lender will most likely want to know how you handle your credit.