My Credit Authority

What is Credit?



Even though credit is all around us, many of us do not know much about it.

What affects your credit rating?

How is it determined?


In its simplest form, credit can be defined as money that is borrowed to purchase goods or services. You obtain credit from a 'grantor' and enter an agreement to pay the 'debt' back, typically plus fees and finance charges.


Your credit worthiness is determined based upon a number of factors, some of which may come as a surprise (such as how long you've lived at your current address), but there are five very important contributors.


  • Payment History: Have you paid your past accounts on time?
  • Amounts Owed: How much money do you owe compared to how much money you make?
  • Length of History: How long have you held the individual accounts you have?
  • Credit Mix: How many different types of credit do you have? Credit cards, mortgage, student loans, etc
  • New Credit: How recently have you opened your newest account?

These factors are not all given equal footing when determining if you obtain credit. They are on a weighted scale as follows:

Your credit score is traditionally known as your FICO score. There are a few other scores, but FICO is the most popularly used so we will focus on that.


Your FICO score can range anywhere from 300 to 850. The higher your FICO score, the more credit worthy you are considered by financial institutions.



If you have a Poor or Bad credit score you may find it difficult to qualify for most new credit. Do not worry!