The Five Components of Your FICO Credit Score

Your credit score, also often referred to as a FICO score, is a three-digit number that is designed to gauge your creditworthiness. Lenders use it to assign interest rates on things such as auto loans, mortgages and credit cards, among other borrowings.

The score, called FICO, ranges from 300-850 and is calculated by Fair Isaac Corp. using information from the three major credit reporting agencies: Equifax Inc., Experian, and TransUnion.

On 12/31/08, the Wall Street Journal reported that Fair Isaac states that a credit score is made up of five components:

  • * 35% reflects payment history: whether or not you pay your bills on time to a lender that reports to one of the three credit-reporting agencies.
  • * 30% reflects amounts owed: how your credit limits compare with the balance you carry; the more you carry from billing cycle to billing cycle, the lower your score.
  • * 15% reflects length of credit history: the longer your credit history, the better ability lenders have to see your track record.
  • * 10% reflects new credit: how many accounts you’ve opened recently.
  • * 10% reflects types of credit used: the mix of accounts — student loans, credit cards, mortgages, etc.


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