5 Credit Score Factors

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by Joe Mahlow •  Updated on Mar. 05, 2023

5 Credit Score Factors
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1. Payment History

Your payment history is the most important when it comes to your credit score; just one missed payment can derail your score. Lenders want to make sure they can expect on-time payments for your debt when considering you for new credit. Most lenders use your FICO score, and payment history accounts for 35% of that. Make your payments on time.

2. Credit Utilization

This is calculated by dividing the credit you are currently using by the total of all your credit limits. This means: how much of your available credit are you using? It can demonstrate how reliable you are with non-cash funds. Using more than 30% of your available credit is a negative. Credit utilization makes up 30% of your FICO score.

3. Credit History Length

How long you’ve had credit adds up to 15% of your FICO score. It’s the age of your oldest credit account, the age of your newest credit account, and the average age of all your accounts. Usually, the longer your credit history is, the higher your credit scores can be.

4. Credit Mix

This means all the different types of credit you have. It can include credit cards, as well as car loans, student loans, mortgages, etc. It scrutinizes the types and how many you have of each. It is a good indicator of how well you’re able to manage a wide range of credit products. Credit mix makes up 10% of your FICO score.

5. New Credit Accounts

This includes the number of credit accounts you’ve recently opened, in addition to the number of inquiries lenders make when you apply for credit. It makes up 10% of your FICO score. If you make too many inquiries or have too many accounts, it can negatively impact your credit score.

If you’re trying to build or improve your credit score, keep these five key factors in mind and think about how you can change your own credit actions to see a credit score boost.

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