How is Your Credit Score Calculated?

Part of good financial planning is understanding the importance of your credit, or FICO, score. Your FICO score is a major determiner when it comes to how lenders view you, and can influence what sort of treatment you get and the interest rates and terms you get from lenders. So, how is this important credit score figured? Here's a breakdown:

• Credit account payment history is the most important factor, at 35%.


• Oustanding debt is another major factor: 30% of your FICO score.


• How long have you been a credit user? This accounts for 15% of your credit score, and the longer the better.


• The number of new accounts opened and/or applied for is 10% of your FICO score.


• Finally, the mix of your account matters: mortgages, credit cards, auto loans, etc., to the tune of 10% of your credit score.