How FICO Scores Are Calculated

FICO Score Components

Your FICO score is calculated using five key factors, each weighted differently to create your final score ranging from 300 to 850.

1. Payment History (35%)

Payment history is the most important factor in your FICO score. It shows lenders whether you pay your bills on time.

What's Considered:

• Payment information on credit cards, retail accounts, installment loans, and mortgages
• Presence of adverse public records like bankruptcies, foreclosures, and judgments
• Number of past due items and how severely they're delinquent
• How recently late payments occurred

2. Amounts Owed (30%)

This factor looks at how much you owe relative to your available credit, known as credit utilization.

Key Metrics:

• Total amount owed across all accounts
• Credit utilization ratio on revolving accounts
• Number of accounts with balances
• Amount still owed on installment loans

3. Length of Credit History (15%)

A longer credit history generally results in a higher score, as it gives lenders more data to assess your behavior.

Factors Include:

• Age of your oldest account
• Age of your newest account
• Average age of all accounts
• How long specific accounts have been open
• How long since you used certain accounts

4. Credit Mix (10%)

Having different types of credit accounts can positively impact your score.

Types of Credit:

• Credit cards (revolving credit)
• Installment loans (mortgages, auto loans)
• Retail accounts
• Finance company accounts

5. New Credit (10%)

Opening several new accounts in a short period can be risky and may lower your score.

Considered Factors:

• Number of recently opened accounts
• Number of recent credit inquiries
• Time since recent account openings
• Time since recent credit inquiries

How FICO Scores Are Used

Lenders use FICO scores to:

• Determine loan approval
• Set interest rates
• Establish credit limits
• Assess lending risk