What’s in my FICO® Score?
Your FICO® score considers both positive and negative information in your report. Your score is calculated from many different places of consumer and credit data. Data is grouped into five categories, each with a percentage of how important each category is and how your score is calculated.
Late payments will lower your FICO® score, but establish or re-establishing good credit history of making payments on time will raise your score.
FICO® Score break-down:
- PAYMENT HISTORY 35%
- AMOUNTS OWED 30%
- LENGTH OF CREDIT HISTORY 15%
- CREDIT MIX 10%
- NEW CREDIT 10%
Payment History – One of the most important factors in a FICO® score, any lender wants to know whether you’ve paid pas credit accounts on time or not.
Amounts Owed – Keeping low balances on open credit accounts is important and doesn’t necessarily mean you are a high-risk borrower. Try and keep balances 30% and below, never exceeding limits.
Length of Credit History – A longer credit history will increase your FICO® score, especially if it has a positive payment history as well. FICO® looks at how long credit accounts have been established, how long credit accounts have been established and how long it has been since you used certain accounts.
Credit Mix – FICO® will consider your mix of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans.
New Credit – Opening several account in a short period of time shows greater risk, especially for those with a short or have little to none credit history.
The importance of any one factor in your credit score calculation depends on the overall information of an individual’s credit profile. Remember that everyone’s credit history is different and thus, impacted differently. As the information in your credit report changes, so does the importance of any factor determining your FICO® score.