Credit points are three-digit numbers, based on a statistical analysis of credit report of some particular person or company. The amount of credit points is an indicator of creditworthiness. The more credit points you have, the better your financial status is for creditors. In the USA credit bureaus are responsible for calculating your credit points. The main sector of credit reporting bureaus is occupied by three companies: Equifax, Experian and TransUnion. They provide credit history check for banks, merchants etc. Credit bureaus make money on selling collected information to credit organizations and interested parties.

It's not hard to guess that there is a certain system of calculation of credit points, some certain rules. And you have probably heard about FICO score. The thing is that there are a bunch of credit score calculation systems. And each credit bureau calculates in their own way. The three major credit bureaus have chosen FICO score, developed by Fair Isaac Company. It is good to know that when you apply for best credit card.

The method of calculation of credit points is not really young. By the end of the 70s almost all large creditors were using formulas for evaluation the credit rating of customers and reliability of their financial status.

Credit points were invented by two main business leaders - Bill Fair and Earl Isaac. These two entrepreneurs founded a company called "Fair Isaac" in 1956. And everything what this company created is still working nowadays.

First of all the system was created to escape prejudices, such as race, religion, color of the skin etc. Then the question with creation of integrated data base arouse. It was caused by inappropriate update of the information about potential customer.

Everything has certainly changed with the implementing of computers, which made the data management considerably safer and easier.

You can learn the amount of your credit points from your credit report. As all three credit bureaus in USA use FICO score, you should be aware of the level of credit score no matter good or bad credit you have. Please take into account that the amount of credit points may be different in each of them. It depends on the periodicity of the info update.

Experian and Equifax offer free credit report and credit points monitoring during 30 days. It can help you to keep a track of all the changes and even escape credit fraud.

The component factors of credit points are:

• 35% stands for payment history. This factor is important, because the creditor wants to know how the customer pays his bills. The amount of points depends on the amount of bills payed on time or delayed.
• 30% points stand for liabilities of the total available credit. The more cards with the balance close to credit limit you own, the lower the credit points are. It is advised not to spend more than 25% of your available credit, and your credit score won't be decreased.
• 15% is duration of credit history. The longer it is the better credit score you have.
• 10% occupy requests for credit cards (no matter good, bad, rewards or student) or loans. Frequent requests and denials are the stop sign for creditors. Maybe you just got into debts?
• 10% points are based on the types of credit you have (mortgage, car loan etc).

Understanding credit score is a key to good credit rating. We advise you to get your free credit score at ApplyForBestCredit.com before you apply for a card you would like to get.