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FICO Scores - Your Credit Score Cheat Sheet by

How a credit score is calculated
credit     factors     score     calculations     fico

Introd­uction

FICO® Scores are calculated from many different pieces of credit data in your credit report. This data is grouped into five categories as outlined below. The percen­tages in the chart reflect how important each of the categories is in determ­ining how your FICO Scores are calcul­ated.

Your FICO Scores consider both positive and negative inform­ation in your credit report. Late payments will lower your FICO Scores, but establ­ishing or re-est­abl­ishing a good track record of making payments on time will raise your score.

Payment history (35%)

The first thing any lender wants to know is whether you've paid past credit accounts on time. This is one of the most important factors in a FICO® Score.

Payment inform­ation on many types of accounts:
    Credit cards – such as Visa, Master­Card, American Express and Discover.
    Retail accounts – credit from stores where you do business, such as department store credit cards.
    Installment loans – loans where you make regular payment amounts, such as car loans and mortgage loans.
    Finance company accounts.
Public record and collection items – reports of events such as bankru­ptcies, forecl­osures, lawsuits, wage attach­ments, liens and judgments.
Details on late or missed payments (“deli­nqu­enc­ies”) and public record and collection items.
The number of accounts that show no late payments.

Amounts owed (30%)

Having credit accounts with an outsta­nding balance does not necess­arily mean you are a high-risk borrower with a low FICO® Score. A long history of demons­trating consistent payments on credit accounts is a good way to show lenders you can respon­sibly manage additional credit.

In this category, your FICO® Score takes into account:
The amount owed on all accounts.
The amount owed on different types of accounts.
Whether you are showing a balance on certain types of accounts.
The number of accounts that show a balance.
How much of the total credit line is being used on credit cards and other revolving credit accounts.
How much is still owed on instal­lment loan accounts, compared with the original loan amounts.
 

FICO Chart

Length of credit history (15%)

In general, a longer credit history will increase your FICO® Scores. However, even people who haven't been using credit long may have high FICO Scores, depending on how the rest of the credit report looks.

FICO Scores take into account:
How long your credit accounts have been establ­ished, including the age of your oldest account, the age of your newest account and an average age of all your accounts
How long specific credit accounts have been establ­ished
How long it has been since you used certain accounts

Credit mix in use (10%)

FICO Scores will consider your mix of credit cards, retail accounts, instal­lment loans, finance company accounts and mortgage loans.

New credit (10%)

Research shows that opening several credit accounts in a short period of time represents a greater risk - especially for people who don't have a long credit history.

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