 TITLE: What Is a Bad Credit History and Rating? CONTENT: What Factors Influence Your Credit Report and Scores?\n-----------------------------------------------------\nThe history of debt management recorded in your credit report is the basis for your credit scores and the determination whether your credit is \"good\" or \"bad.\"\nGenerally speaking, credit report entries that indicate the difficulties with credit management will be detrimental to your credit profile and your credit score, while those that show sound credit management will promote good credit scores. Credit report entries that can hurt your credit scores the most include:\n*   **Late or missed payments**: Payment history is the most important aspect of your FICO® Score, and even one 30-day-late or missed payment can hurt your score. Payment history is responsible for about 35% of your FICO® Score.\n*   **Excessive credit card usage**: Using a high percentage of the borrowing limit on individual credit cards or on all your cards collectively can make lenders think you're overly reliant on credit. You can calculate that percentage, known as credit utilization, for each credit card by dividing your current outstanding balance by its borrowing limit, and then multiplying by 100 to get a percentage. You can also calculate your overall utilization by dividing the sum of all your balances by the sum of all your limits. Lenders like to see credit utilization, for each card and especially on all cards overall, of less than 30%—individuals with the best credit scores tend to keep utilization at 10% or less. Credit utilization accounts for 30% of your FICO® Score.\n*   **Seeking a lot of credit in a short time**: Whenever a creditor requests your credit report or a credit score based on it for a lending decision, a hard inquiry is recorded in your credit file. These inquiries stay in your file for two years and can cause slight temporary reductions in your credit score. Lenders look at the number of hard inquiries to gauge how much new credit you are requesting. Too many inquiries can raise the level of risk you present to a lender or scoring model and affect your credit scores and the credit you'll be able to secure. New credit activity accounts for about 10% of your FICO® Score.\n*   **Major negative events**: Major credit management missteps that can appear on a credit report include foreclosure, bankruptcy, repossession, charge-offs (the lender gives up hope of collecting what you owe and closes your account) and settled accounts (the lender accepts less than the full amount you owe in a negotiated arrangement, and then closes your account). Each of these can severely hurt your credit for years, even up to a decade. END