How Is My Credit Score Determined?

A breakdown of how your credit score is calculated.

1. Payment History (35%): Your willingness and ability to pay due balances; on-time or late.


- Tip: Late payments have a tremendously negative impact on your profile.

2. Credit Usage or Credit Utilization Ratio (30%): Your amount of credit in use. The ideal credit utilization ratio is less than 30%.

- Tip: Higher balances indicate that you may not have the ability to pay in full.

3. Length of Credit History (15%): Your average age of your accounts and how long those individual accounts have been open.

- Tip: Voluntarily closing an account hurts your credit scores; avoid this common mistake.

4. The Types of Credit Used (10%): Your mixture of different types of tradelines – revolving and installment.

- Tip: Finance company accounts score lower than bank and store accounts.

5. Opening New Accounts or Inquiries (10%): How often you apply for and open new accounts.

- Tip: Lenders typically advise that no more than 5 inquiries be present on each bureau.