Fico : How Is Your Credit Score Determined?

Ever Wonder What Makes up your credit score?

Well, there are 5 elements that go into determining your credit score. For those who are new to credit, or don’t understand how your scores are calculated, here is a reference, and chart to refer to. Your FICO score is determined by:

What Are The 5 Elements?

1. Payment history

If you notice your payment history makes up 35% of the total credit score and the most important factor in calculating credit scores. According to FICO Experts, past long-term behavior (such as paying bills late) is used by lenders to predict future long-term behavior. FICO keeps an eye on revolving loans – such as credit cards, and installment loans, such as mortgages, student loans, car payments. FICO scores consider the frequency, recency, and severity of reported missed payments.

One of the best ways for borrowers to improve their credit score as a whole is by making consistent, timely payments.

2. Credit utilization

Credit utilization – the percentage of available credit that has been borrowed – makes up 30 percent of your total credit score.

FICO views borrowers who habitually max out credit cards – or who get very close to their credit limits – as people who cannot handle debt responsibly, a borrower should maintain low credit card balances.

FICO says people with the best scores tend to have an average credit utilization ratio of less than 6 percent, with three accounts carrying balances and less than $3,000 owed on a revolving account. As you see, the first two factors make up nearly two-thirds of your score. So, if you pay your bills on time and don’t carry big balances, you’re two-thirds of the way toward a good credit score. The final credit score pieces can move you from a good score to a great one.

3. Length of credit history

Length of credit history – the length of time each account has been open and the length of time since the account’s most recent action – is 15 percent of your total credit score.

4.New credit and 5. credit mix

New credit and credit mix each comprises 10 percent of your total FICO credit score.

Even those new to credit should avoid opening too many credit lines at the same time, since such behavior could suggest they are in financial trouble by needing significant access to lots of credit. Credit mix, meanwhile, is somewhat of a vague category, but experts say that repaying a variety of debt products indicates the borrower can handle all sorts of credit. According to FICO, historical data indicates that borrowers with a good mix of revolving credit and installment loans generally represent less risk for lenders.


If your building credit or repairing it, be sure that you understand these elements of your FICO score so that you know what lenders look for when determine whether they will lend or approve you credit.

Credit Corrector Solutions understands the importance of good credit. We specialize in credit repair and credit services and we help consumers raise credit scores. Contact us today for a free consultation 877-335-8865 or fill out our contact form on this site.

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