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Credit Scoring Factors

Ever wonder how your credit score is calculated? Fair, Isaac, and Company (FICO), the biggest credit scoring company, makes clear exactly what factors it considers when determining credit scores. Most creditors and credit bureaus use Fair, Isaac's scoring system or have a system based on the Fair, Isaac system. According to Fair, Isaac, the factors considered in determining FICO scores are:

Payment history (about 35% of the score)
Making payments consistently on time indicates responsibility.

Amounts owed on credit accounts (about 30% of the score)
Fair, Isaac is looking to see whether you manage your credit responsibly. A large number of accounts with balances may indicate that you are over-extended.

Length of credit history (about 15% of the score)
A longer credit history generally increases the score.

New credit (about 10% of the score)
Fair, Isaac likes to see an established credit history, without too many new accounts. Opening several accounts in a short period can indicate greater risk.

Types of credit (about 10% of the score)
Fair, Isaac is looking for a mix of different types of credit. However, this factor is usually not important if there is other sufficient information upon which to base your score.

American Consumer Credit Counseling (ACCC) provides credit counseling, financial education and debt relief options for individuals and families with too much credit card debt or unsecured personal debt. Our certified credit counselors have helped thousands of consumers find credit card debt relief by learning how to reduce debt and how to get out of credit card debt. Our debt assistance services and debt management plans allow consumers to consolidate credit card bills into a single payment, and provide help with negotiating credit card debt in order to lower interest rates and finance charges, to ultimately eliminate debt through a credit card payoff plan.

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