We won’t sugarcoat it — keeping tabs on your FICO® score just isn’t all that exciting. While Fair Isaac — the company responsible for the beloved FICO® score — isn’t giving too much detail on the algorithm front, they do share two important points about your score:
- A breakdown of the five factors that make up your score
- How much each factor is weighted in the overall calculation (denoted by percentage, but this will vary some from person to person)
This info can provide a good framework for how your financial decisions could impact your score. The five factors used to determine your FICO® Score include:
- Your payment history (~35% of your score)
- How much you currently owe (~30% of your score)
- How long you’ve had credit (~15% of your score)
- The types of credit you have (~10% of your score)
- When you last applied for credit (~10% of your score)
Our friends at Sindeo are helping you understand these five factors used when determining your FICO® score. Get the full explanation over on their blog.
This blog post is an excerpt from Sindeo’s “Credit Counts: How Better Credit Can Help You Score a Better Mortgage.” See the first post on understanding your credit report and score here.