What makes up my credit score?

A credit score, or FICO, reflects your credit history, how much debt you are carrying, and your payment history on those debts. Your score will determine your loan qualification. FICO scores range from 300 to 850; the lower your score, the more risk you present to lenders which can impact your ability to get approved and the cost of your loan. A credit score is a snapshot of your payment history and it will change month to month.

FICO Scores are calculated from data that can be grouped into five categories.

Payment History reflects amounts due and delinquency on various accounts such as credit cards, loans, and mortgages. Your history also includes public records such as bankruptcy, suits, and liens.

Amounts Owed shows the amount owing on specific accounts, number of accounts with balances, proportion of credit lines used, and proportion of installment loan amounts still owing.

Length of Credit History is the time since accounts were opened, and the time since account activity.

New Credit is the number of recently opened accounts, number of recent credit inquiries, and the timing of these transactions. Another factor is the re-establishment of positive credit history following past payment problems.

Types of Credit Used considers whether it is a one-time loan you are slowly paying back, like student loans or revolving credit that fluctuates month to month, like your AMEX card.

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