I am often asked: "What makes up my credit scores?"

Credit Score Factors

Although we don't know 100% about how a credit score is determined, FICO considers the following factors (the weight it assigns to each category is in parentheses):

Length of your credit history (15 percent).
The longer your accounts have been open, the better.

Payment History (35 percent).
Your score is negatively affected if you have paid bills late, had an account sent to collection, or declared bankruptcy. The more recent the problem, the lower your score -- a 30-day late payment today (currently past due) might even hurt more than a bankruptcy five years ago.

Outstanding Debt (30 percent).
If the amount you owe is close to your credit limit, that is likely to have a negative impact upon your scores. A lower balance on two cards is generally better than a high balance on one card. Your best bet is to pay your credit card balances off in full monthly.

Recent inquiries on your report (10 percent).
If you have recently applied for many new accounts, that will likely negatively affect your score. Promotional inquiries or checking your own credit does not count against you.

Types of credit in use (10 percent).
FICO likes to see that you have a history of managing a variety of account types.