How are FICO Scores calculated?

FICO Scores are calculated using many different pieces of credit data in a credit report, according to myFICO. This data is grouped into five categories: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%) and credit mix (10%).

Payment history (35%)
One of the most important factors in a FICO Score, payment history shows a lender if a person has paid past credit amounts on time.

Amounts owed (30%)
If a person is using a lot of their available credit, this may indicate that they are overextended.

Length of credit history (15%)
A longer credit history increases FICO Scores. FICO Scores take into account how long regular and specific credit accounts have been established and how long has it been since certain accounts have been used.

Credit mix (10%)
FICO Scores will consider a mix of credit cards, retail accounts, installment loans, finance company accounts, and mortgage loans.

New credit (10%)
According to myFICO, research shows that opening several credit accounts in a short period of time represents a greater risk, especially for people who don’t have a long credit history.

A few things to keep in mind:

  • The percentages are based on the importance of the five categories for the general population. The importance of each category varies per person.
  • A FICO Score considers both positive and negative information in a credit report.
  • Late payments will lower a FICO Score.
  • Making payments on time will raise a credit score.
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