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How a Credit Score Is Calculated

Savvy ATM: Credit Score Anatomy

The fact that a cloud of inconsistency hangs around credit scores makes knowing your exact number nearly impossible, but all scores based on the FICO system consider the same factors to generate your magic number. Knowing these five components gives you an idea of the areas that are hurting your score and makes some sense of how your score came to be. Find out what they are when you


These percentages are according to myFICO and you can find more information on each category by visiting the FICO website.

  1. Payment history: 35 percent. Whether or not you've made punctual payments is the heaviest factor in your score.
  2. Outstanding debt: 30 percent. If your balances are high, especially compared to the amount of credit available to you, your score will suffer.
  3. Length of credit history: 15 percent. Lenders want to see that you have a history of managing debt.
  4. Any new credit: 10 percent. When you apply for a loan or other credit, lenders will look at the number of accounts you've recently opened.
  5. Types of credit used: 10 percent. This refers to the number of accounts you have like credit cards, mortgage, or installment loans.


Join The Conversation
thelorax thelorax 8 years
I've always wondered what the breakdown was, how much different factors matter - thanks for simplifying this, Savvy!
ilanac13 ilanac13 8 years
ok - see THIS i understand. each time there are posts on how to understand and affect your score - i don't get it but this i do. at least now i know that i'm going to have a higher score in the coming months since i've ALWAYS been on time with payments at least for the last 7+ years..and i'm slowly lowering my balances so there's more credit vs. debt. i also don't open new accounts if at all possible - so there aren't new inquiries and the sort - so i've got a few good things coming up in the next few months right?
CoralAmber CoralAmber 8 years
So what's good and what's bad? I know having established credit and low balances is good, but is it bad to open a new account? And does having a higher or lower number of cards add points to your score?
SugarKat SugarKat 8 years
That really helps. It's nice to know how we're valued.
bellaressa bellaressa 8 years
This is great information. I too, have been trying to get my credit back on the right track. I have been doing well in the last 3 years but every little bit of education helps. Thanks!
valancyjane valancyjane 8 years
Renee, time definitely helps. I think I read somewhere that negative items fall off your credit report after 7 years -- that might not be true, but more recent activity/history definitely counts for more. My credit history was not great between 1998 and maybe 2003, but I've cleaned up my act and my scores are pretty darned good. Right now the only thing going against me is the amount of my debt - but if you keep paying responsibly, time takes care of that too. I keep reminding myself, I didn't get into this fix all at once and I won't get out all at once either.
Renees3 Renees3 8 years
this is good to know, I've been working on my credit for a while now. It's trying to undo my past though. Back in '01 I went to collections for 2 accounts and that hurts me a ton. Basically for the past 5 years I've been perfect, always on time etc. So hopefully it'll keep goin up
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