What Effects Your Credit Score (FICO)
The exact calculation of the FICO score is kept secret as proprietary information, but there are some general guidelines we can apply.
Approximately 35% of a credit score may be based upon payment history. A credit score is negatively impacted if bills are paid late or if there is a history of delinquent payments listed on the credit report, including matters of public record such as bankruptcy, collection accounts, etc.Amounts Owed:
Approximately 30% of a credit score may be based upon amounts owed or other outstanding debt. A credit
score can be negatively impacted if the amount owed is close to the credit limit. A low balance on two credit cards may be better than a high balance on one credit card.Length of Credit History:
Approximately 15% of a credit score may be based upon length of credit history. A credit score can be positively impacted the longer that accounts have been open, especially if they are with one financial institution.Taking on More Debt:
Approximately 10% of a credit score may be based upon how much new debt a consumer is incurring. A
credit score may be negatively impacted if someone has recently applied for a number of new credit accounts.
Promotional inquiries usually do not negatively impact a credit score.Types Credit in Use:
Approximately 10% of a credit score may be based upon the types of credit currently in use by a
consumer. A credit score is usually negatively impacted by loans from finance companies.