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  • Writer's pictureThe Credit Laboratory - Research Team

How is my credit score calculated?

Updated: Jan 4, 2022

Once you know how your credit score is calculated you're in a better position to improve your credit scores. Knowing how your credit score is calculated is only the first part. Please understand that there are different credit score models available and the most common are Vantage and FICO scoring models. Your Vantage credit scores are mostly shown on credit monitoring sites that you may visit to pull your credit scores such as Credit Karma, IDClub, Identity IQ, ect. If you would like to review your FICO Credit Scores you can do so at myScoreIQ.

So how is my credit score broken down and how will knowing that information help me to make smarter credit decisions......

Credit Score Breakdown:

  • Payment History - 35%

  • Credit Utilization - 30%

  • Credit Age - 15%

  • Credit Mix - 10%

  • New Credit - 10%

Payment History (35%)

The first thing any lender wants to know is whether you've paid past credit accounts on time. This helps a lender figure out the amount of risk it will take on when extending credit. This is the most important factor in a FICO Score.

Be sure to keep your accounts in good standing to build a healthy history.

Amounts owed (30%)

Having credit accounts and owing money on them does not necessarily mean you are a high-risk borrower with a low FICO Score. However, if you are using a lot of your available credit, this may indicate that you are overextended—and banks can interpret this to mean that you are at a higher risk of defaulting. If you are having a hard time getting approved for credit cards please review our lists. We have complied two list to help you in all areas.

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 for long may have high FICO Scores, depending on how the rest of their credit report looks.

Your 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 (10%)

FICO Scores will consider your mix of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans. Don't worry, it's not necessary to have one of each.

New credit (10%)

Research shows that opening several credit accounts in a short amount of time represents a greater risk—especially for people who don't have a long credit history. If you can avoid it, try not to open too many accounts too rapidly.

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