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What determines your FICO score?

Updated: 9/11/2023
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15y ago

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There is an incredible amount of information that goes into determining your FICO score; however, it can be broken down into five main categories (in descending order, from most important to least important): (1) Payment History, (2) Amount Owed, (3) Length of Credit History, (4) Types of Credit Used, (5) New Credit. This is for the average person. For those who have a bery short history with credit in general, the numbers may be slightly different. *Quick note: How many recent inquiries you have had into your credit used to factor heavily when determining your credit score. Soon, if not already, this factor will be reduced, while the weight given to your debt-to-income ratio will increase significantly. Thus, one of the best ways to improve your credit score will be to reduce debt as much as possible in relation to how much money you make and how much credit you have available (this of course was always a major factor, but will become so even more soon). Notice that Payment history is the single most important factor. In fact, it accounts for a little over 1/3 of your FICO score. Paying your bills on time is extremely important. You can generally get away with making a payment late up to 30 days; after that, it will negatively affect your credit score. The second factor I listed, amount owed, accounts for a little less than a third of your score. Amounts owed is similar to your debt-to-income ratio. These two factors combined account for about 2/3's of your credit score! So, in conclusion: Make your payments on time, keep your debt low (don't just make minimum payments, and don't let your spending on credit cards increase beyond your means), and continue to do so for a long period of time (factor #3, another 15% of your score). If you cover these three bases, you will have over 75% of your credit score under control, and the rest is easy.

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Q: What determines your FICO score?
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