How Your Credit Score Is Calculated

Lenders will use a variety of information to calculate your credit score. Most use the FICO scoring method. FICO scores are calculated from a variety of information in your credit report.

The information in your credit report used to calculate the score can be grouped into five categories:

Payment History. Whether you’ve paid your bills on time accounts for 35 percent of your FICO score. Payment history information that is considered includes delinquencies, how long accounts were delinquent until you caught up, bankruptcies, judgments, liens or any other public financial disclosures.

Amounts Owed. How much money you owe accounts for 30 percent of your credit score. This includes how much available credit you have, how close you are to the limits on your current accounts and how many credit lines are available to you.

Length of Credit History. The amount of time you’ve had credit counts 15 percent toward your credit score. This includes how long it has been since you’ve used accounts that carry no balances.

New Credit. Any new credit that you are seeking is 10 percent of your total credit score. It also includes re-establishment of payment on delinquencies.

Types of Credit Used. The kinds of accounts you have – revolving credit, secured bank loans, mortgage loan, car payment – are considered as10 percent of the total score.

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