Your credit score — the three-digit number that determines the interest rate you'll pay for credit cards, car loans and mortgages — is based on a number of factors but most importantly, it's a measure of how much you are borrowing and how responsible you are when it comes to making payments.
The length of your credit history is another one of the most important factors in a credit score because it gives lenders a better look at your background when it comes to repayments.Since Randy had already paid off his mortgage and has no student debt, that auto loan was key to show a diversified mix of accounts.
"The more different types of loans that you've proven you can handle successfully, the better your score will be."
Source: Loan Digest (loandigest.net)
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