What Makes up a Credit Score

FICO scores are based on specific credit history, withhundreds

of inputs used to find your score.There are 5 main parts of your

credit score.

Payment History 35% of yourcredit score

Payment history measures how you've paid on your debts.

Payment history is the largest part of your credit scorebecause

if you've recently missedpayments   your creditors, it'slikely

those missed payments willcontinue, and may lead to default.

Payment history also measures how severe amissed

payment has been. An item incollection is worse than an item

paid 30 days late.

Tips to improve Make payments ontime, all the time

even items in dispute. Pay the billand worry about refunds

later.

Amounts Owed 30% of your creditscore

Amounts owed measures how maxed out you are.Amounts

owed is the second-largest part ofyour credit score because a

person that is maxed out has nosafety valve in the event of a

crisis. Amounts owed is not aboutthe dollar amount you're

borrowing it's about thedollar amount you're borrowing

relative to the amount available toyou.

Tips to improve Don't close outold credit cards, and

don't lower your available creditlimits. Having access to

credit is good.

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Credit History Length 15% of your credit score

Your credit history is your track record with respect tomanaging

credit. Credit history matters inthe FICO model because

experienced users ofcredit are viewed differently from new users

of credit. Similar to the hiringprocess for a job, the credit bureaus

want to see this isn't your firstexperience.

Tips to improve Don't close cardswith history. You need

them to show you're experiencedwith credit.

New Credit 10% of your creditscore

Tip

Dont close old, no-fee credit

cards when youre done with

them. Instead, use them

periodically, and pay your

balances in full. This buildscredit

history and credit length.

This category accounts for your recent attempts to securenew credit. In general, the more credit for which you've

applied, the more damage it will doto your credit score. This is more true for creditcards than for mortgage

applications. A consumer in searchof new credit cards is presumed to need more credit lines.

Tips to improve When you shop fora mortgage, multiple credit checks can count as a single credit inquiry,

protecting your credit score.

Types of Credit 10% of yourcredit score

The type of credit you carry matters and not all credittypes are the same. Installment loans such as mortgage loans

and student loans, for example, areconsidered better than credit cards and charge cards. This isbecause

installments loans eventually paydown to zero. Consumer cards, by contrast, can only go up.

Tips to improve Don't carry anabundance of store charge cards. Interest rates are high and the FICO

model looks unfavorably upon them.