Credit scores take into account certain information from your credit history. The most commonly known scores, FICO scores, consider the factors listed below.
All of these factors are considered in the score, and no one piece of information by itself will determine your score. The exact weights that are given to each factor have not been made public by the credit bureaus or FICO. However, those companies do provide some estimates regarding how much weight each is given and how they can affect your score. You can find out more information on how the scoring models work by visiting the websites of the credit bureaus, or of FICO.
Payment history is a big factor in your credit score. Your score will likely be lower if you have paid bills late, have had an account referred to collection, or if you have declared bankruptcy. The following are examples of aspects of your payment history that can impact your credit score:
- The payment information on credit cards, store accounts, car loans, finance companies, mortgages, and other credit accounts
- Information in public records, such as bankruptcy filings, other judgments, liens, wage attachments, and child support
- The number of accounts in collection
- Past due accounts: How many items are past due? When was your last past due item? How much money is past due? How late are the payments?
- How many accounts never had late payments
Amounts you owe
Typically, the amount of debt you have will be compared to your credit limits. If the amount you owe is close to your credit limit on a particular account or your overall amount of available credit, your score will probably be lower, because it will appear that you're using most or all of your available credit and not paying it down.
Think about how many of your accounts have balances, how much you owe on all of your accounts, and how much you owe on specific kinds of accounts in determining the score based on your current debt.
Length of credit
Generally, credit models consider the length of your credit track record - how long ago each account has been open a. A short credit history could hurt your score, but can be offset by other factors like timely payments and low balances.
Recent credit history
Many scoring models consider whether you have applied for credit recently by looking at inquiries on your credit report. These inquiries appear when you apply for credit and are included in your report. If you have recently applied for too many new accounts, your credit score might be negatively affected. Not all inquiries are counted, however. Inquiries by creditors who are monitoring your account, or looking at credit reports to make prescreened credit offers, are not counted.
Types of credit
Although it is generally good to have established credit accounts, too many accounts may have a negative effect on your score, and the type of credit account may be relevant as well. For example, under some scoring models, loans from finance companies may negatively affect your credit score.
Updated: July 2017