Understanding the Calculation of Your FICO Score
Your FICO Score Isn’t Such a Mystery After All
Almost everyone knows what a FICO score is, but if you ask them how it’s calculated, the answers you get will be varies. Some people say it’s a secret while others insist there is no actual calculation and that FICO is akin to an advanced guessing game. Believe it or not, it isn’t that hard to understand what makes up your FICO score. If you’ve been wondering, we have the answers.
Five FICO Factors
There are five main factors that make up your FICO score including your payment history, the amount of money you owe, the length of your credit history, the types of credit you use, and how many new credit accounts you have opened.
Your payment history accounts for approximately 30 percent of your FICO score as does the amount of money you owe. The length of your credit history counts for 15 percent and the type of credit used and how many new credit accounts you have each account for approximately 10 percent of your FICO score.
And no, this information isn’t a big secret. FICO makes it readily available at their website. So while it may be hard to understand how your exact FICO score is determined, you now at least know how much certain aspects of your credit affect the score you have.