How Is Your FICO Score Calculated?

The FICO score is one of the most important financial numbers within the history of your personal financial situation. Largely, the FICO score can be used to determine the health of your personal finances – therefore, it is important to realize how the score is calculated and what factors are used to determine if you are truly a candidate for a loan or credit line from a lending institution.

35% of the credit score is determined by the history that you have developed within regards to your credit cards and other accounts that use credit, including the behavior that you have used to repay bills that have been accumulated.

30% of the credit report depends on the amount of money that is owed towards different sources of credit, in combination with the credit limits that are available to the consumer. These numbers are used to calculate a large portion of the credit rating and expert’s recommend that balances be kept under thirty percent of the credit limit which is available to the consumer.

15% of the credit rating is determined by the length of time that the consumer has spent developing a credit history. The longer that you have been using credit, the higher this portion of the credit score will be.

10% of the credit score is determined by the different types of credit that have been used and successfully repaid.

The last 10% of the credit report score is determined by the amount of new applications that the consumer is applying for. Be sure to reduce the amounts of loans and credit cards that are being applied for, as too many within a short period of time can lead to a lower score.