Credit Secrets & Tips Blog

As a rule, credit score analyze the credit related information on your credit report.  How they do this varies.  Since FICO scores are frequently used, here’s how these scores assess what is on your credit report:

1.  Your payment history - about 35% of a FICO score

Have you paid your credit account on time?  Late payments, bankruptcies and other negative items can hurt your credit score.  But a solid record of on-time payments help your score.

2.  How much you owe - about 30% of a FICO score

FICO scores look at the amount you owe on all your accounts, the number of accounts with balance, and how much of your available credit you are using.  The more you owe compared to your credit limit, the lower your score will be.

3.  Lengthy of credit history - about 15% of a FICO score

A longer credit history will increase your credit score.  However, you can get higher score with a short credit history if the rest of credit report shows responsibility credit management.

4.  New credit - about 10% of a FICO score

If you recently applied for or opened new credit accounts, your credit score will weight this fact against the rest of your credit history. FICO score distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur. 

If you need a loan, do your rate shopping within a focused period time, such as 30 days, to avoid lowering your credit score.

5.  Other factors - about 10% of a FICO score

Several other minor factors also can influence your score.  For example,  having a mix of credit type on your credit report - credit cards, installment loans such as a mortgage or an auto loan, and personal lines of credit - is normally for people for with longer credit histories and can add slightly to the credit score.