While we don't know exactly how
score is determined, FICO considers the following factors
(the approximate weight it assigns
to each factor is
1 - Payment history (35%). Your score is negatively
affected if you have paid bills late, had an account sent
to collection or declared bankruptcy. The more recent the
problem, the lower your score -- a 30-day late payment today
hurts more than a bankruptcy five years ago.
2 - Outstanding debt (30%). If the amount you
owe is close to your credit limit, that is likely to have
a negative effect on your score. A low balance on two cards
is better than a high balance on one.
3 - Length of your credit history (15%). The
longer your accounts have been open the better.
4 - Recent inquiries on your report (10%). If
you have recently applied for many new accounts, that may
negatively affect your score. Promotional inquiries don't
5 - Types of credit in use (10%). Loans from
finance companies generally lower your credit score. FICO
says this is most important when there isn't a lot of other
information upon which to base a score.
Although this is a good guide as to what credit
scoring companies deem important, keep in mind that some
companies may consider different factors.
Among the items that credit scoring companies
cannot consider are age, race, gender, education, national
origin, marital status and receipt of public assistance.