How is a FICO Credit Score Determined?

by : Peter Kenny

There are five key factors that make up your FICO score, which is also known as your credit score: your payment history, any outstanding debts, the length of your credit history, the number of inquiries, and the types of accounts held. Each of these elements is given a different weight in the calculations that determines your FICO score. Your payment history comprises 35% of the score, your outstanding debt is 30%, your credit history age makes up 15%, and both the number of inquiries and account types are 10% of your total FICO score.

Now you know what factors are included in your credit score. What does each of these elements include? And more importantly, what is considered good and what is bad for each of these components?

Payment History

Your payment history includes the details of how you've been paying your bills. Or for that matter, if you've been paying them at all. Each credit account you hold reports your payments as either on time or late. Late payments are reported as being 30-, 60-, 90-, and 120-days late. After six months of no payments being made, many creditors charge-off your account, considering it an uncollectible account. The more recent the late payments are, the more detrimental the effect is on your credit score. On-time monthly payments increase your score in this area.

Outstanding Debts

This portion of your FICO score takes into account the total amount you owe on all your credit accounts. This includes credit cards, department store cards, student loans, auto loans, mortgages, open lines of credit, etc. In addition to considering the total amount you owe, the FICO score also considers the total amount of credit you have available. This ratio is known as your credit utilization. The higher your credit utilization, meaning the closer your balances are to the limit, the lower your credit score. It is best to keep credit account balances at or below 30% of the limit.

Credit History Age

The length of time that you have had credit is another important factor of your FICO score. A longer credit history is better than a shorter one. This is because there is more data to create a pattern of good or bad payments.


Each time a lender uses your FICO score to make a decision about extending you credit, an inquiry is made to a credit bureau. This inquiry will appear on your credit report. Multiple inquiries within a relatively short period of time have a negative effect on your FICO score, especially if these are credit card inquiries. The fewer the inquiries the better. The good news is that only inquiries from the past 24 months are considered as relevant to your FICO score.

Account Types

When you have several different kinds of credit accounts, such as loans and revolving credit, it is better than having only one type of credit account.