What is a FICO™ (credit score)?

A FICO score is a credit scoring system that is commonly used by financial lenders to evaluate the borrower. Here's a list of different factors that impact your credit score and their approximate percent of impact.

Types of Credit in Use:10%--Considers the number of credit accounts and the mix of credit types: credit cards, installment loans, mortgages, and is most important if you don't have a very lengthy credit history.

Payment History: 35%--Takes into account (1) many different types of payments, including mortgages, major credit cards, department store credit cards, car loans, other installment loans such as for furniture, etc., (2) information from public records such as bankruptcies, liens, lawsuits, foreclosures, judgments, and wage garnishments, (3) details of any missed or late payments, such as the amount, how long ago it occurred, and how late it was.Amounts

Owed: 30%--Looks at (1) the total of all the amounts you owe for all accounts, (2) the mix of amounts owed (credit cards versus installment loans, for example), (3) the number of accounts that have balances, (4) how much of your total credit available on credit cards and installment loans you're using (the closer you are to maxing out your available credit, the more negative the impact on your score), and (5) how much of the original balance borrowed you still owe on installment loans, like your car loan.

Length of Credit History:

Credit History15%--As long as you don't have negative information in your file, the longer your credit history, the higher your score.

New Credit: 10%--Considers (1) how many new credit accounts you've opened recently, (2) how long it's been since you opened a new credit account, (3) how many requests you've made for credit recently, (4) how long it has been since lenders have requested credit information on you, and (5) how good your recent credit history has been.