What Goes Into Your FICO Credit Score?

What Goes Into Your FICO Credit Score?

What makes up your credit score? How is it calculated? Consumers are often perplexed about how their credit scores are computed and what affects their scores. To better understand, we will jump into the basics of what makes up a FICO credit score.

To start, there are five factors that influence your credit score. Within each one of these five factors, there are a number of things that impact your score.


The biggest influence on your credit score is payment, which has a 35% impact. The first thing lenders check is to make sure all your accounts have been paid on time. Credit cards, retail accounts, installment loans, finance company accounts, and mortgage loans all will show payment history. Having bankruptcies, foreclosures, lawsuits, judgements or liens will adversely affect your score. If you have late or missed payments in your history, your credit score will factor in how late the payment was, how much was past due, how recent it was past due, and how many accounts are past-due. It also takes into consideration how many accounts are in positive standing.



The 2nd largest impact factor is the number of accounts you have open, which accounts for 30% of your credit score. You aren’t necessarily high risk just because you have balances on credit accounts. It’s based greatly on what is deemed to be too much for an individual credit profile. Some of the impacting factors are:
• The balance on all accounts
• The balance of specific types of accounts
• How many accounts have a remaining balance
• The amount of credit utilization on open accounts-generally the greater the ratio, the more negatively it impacts your credit score
• Installment loan balances



Span of credit history has a 15% impact on your credit score. Generally, the longer your credit history, the higher your FICO score. It depends on how long the accounts have been open and the time since the latest account activity.



10% of your FICO credit score is based on new credit. New credit can impact your score based on:
• Number of recently opened accounts and percentage of new accounts – new accounts lower average account age, so if you are lacking other credit info, it is best to avoid opening a lot of new accounts too quickly.
• Number of and length of time since most recent credit inquiries – FICO only takes into account the past twelve months and generally has minimal impact.
• How long accounts are past due – late payment history can be overcome, rebuilding credit and making timely payments will increase your score over time.



10% of your FICO score is made up from credit utilization. This is based on the variety of credit accounts, including credit cards, retail accounts, installments and auto loans, and mortgage loans. It isn’t essential to have one of each of these types of accounts, especially if you don’t plan to utilize them, but having a blend of credit cards and installment loans with good payment history will absolutely have a positive impact on your credit score. Those with responsibly managed credit cards are generally lower risk than those with no credit cards.