How your credit score is calculated and tips to make it better

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KANSAS CITY, Mo. -- Your credit score is the number that lenders typically use to estimate the risk they would take on in giving you a loan. Kathy Stepp visited FOX 4 to share how your credit score is figured and how it affects you. The number was originally derived by a formula created by Fair Isaac & Company, so the credit score is sometimes referred to as the FICO score.  (The three credit reporting agencies now use slightly different formulas, so the scores vary a little.)  The formula includes payment histories, amounts owed, length of credit history, amount of ‘new’ credit, and types of credit used.

How your credit score is calculated

How your credit score is calculated

Tips to increase your credit score:

- Pay your bills in full and on time
- Keep your debt to a minimum
- Close unused accounts
- Contact creditors before they contact you
- Use a mixture of credit cards and installment loans