FICO Credit Score – What’s It Comprised Of?

November 28, 2009

Credit Basics

The FICO credit score is comprised of a number of different components, which are broken down below for your reference.    The three credit reporting agencies in the United States of America, Equifax, Experian, and TransUnion, collect data about consumers used to compile credit reports. The credit agencies use FICO software to generate FICO credit scores, which are sold to lenders.   fico credit score

A good score can have banks competing for your business when you apply for a loan.   A bad score may mean that you won’t qualify for your auto, mortgage or credit card – or if you do, you may only be offered high rates which will cost you extra money each month.   Knowing your FICO credit score is the first step toward understanding your credit picture.   Knowing how to improve it is the second step, and we’ll discuss different ways to improve your FICO credit score in subsequent posts this week.

  • 35% – Payment History
    • Number of accounts paid
    • Number of negative public records
    • Delinquent accounts, past due items, how long since any late payments
  • 30% – Amounts You Owe (keep under 30% per credit card)
    • Types of accounts with balances
    • Amounts owed vs. original balances
    • Amounts owed vs. credit limits
    • Number of zero balance accounts
  • 15% – Length of Credit History (the longer the better)
    • Total credit history length
    • Length of time since accounts opened
    • Time since last activity
  • 10% – Types of Credit Used (many store and credit cards bad)
    • Types of accounts (mortgage, car, credit card, store cards)
    • More credit cards lowers the score
  • 10% – New Credit (bad)
    • Number or accounts recently opened
    • Number of recent credit inquiries
    • Time since recent inquiries
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