How Is a Credit Score Calculated? The 5 FICO Factors + Exact Percentages

FICO Score · Credit Score Calculation · Payment History · Credit Utilization · Houston Credit Repair

Your credit score is a calculated number, not an opinion. Every point comes from a specific formula with exact weights. Knowing those weights tells you exactly which factor to move first and how fast it can change.

Updated April 2026 · Source data: myFICO.com FICO Score Education, Experian State of Credit 2024, Fannie Mae / Freddie Mac mortgage underwriting guidelines

A FICO Score runs from 300 to 850. It is produced by a formula with five inputs. Each input has a fixed weight. Nothing else goes into the number. No mystery, no judgment, no subjectivity. Only data from your credit report, run through those five weighted factors. This page names every factor, gives you the exact percentage, and tells you which ones Houston residents can move the fastest.

What is a credit score and what range is it on?

Three companies collect credit data: Equifax, Experian, and TransUnion. Each runs the FICO formula independently against its own file on you. That means you have three FICO scores at any given time. They are usually close but rarely identical, because lenders do not always report to all three bureaus.

VantageScore is a separate scoring model developed jointly by the three bureaus. Credit Karma, Capital One CreditWise, and Experian's free tools all show you VantageScore 3.0. That number is real. But it is not what most Houston lenders use when you apply for a mortgage, car loan, or credit card.

Houston's average score of 688 puts the city in a position where one or two targeted moves, such as clearing a collection or paying down a high-balance card, can push a resident from "fair" to "good" and from "good" to "very good." The factors below determine exactly how much each move is worth.

What is payment history in a credit score? (35%)

FICO evaluates payment history across credit cards, installment loans, mortgages, auto loans, and student loans. Rent and utilities are not included unless a landlord reports them through a specialty bureau. Medical bills were recently removed from most standard credit reports by all three major bureaus as of 2023 for amounts under $500.

The severity of a late payment increases in tiers. A 30-day late mark hurts significantly. A 60-day late hurts more. A 90-day late carries more damage still. After 120 to 180 days, many lenders charge off the account, which triggers both a charge-off entry and, later, a collection account from a buyer. Both entries remain on your report for seven years from the original Date of First Delinquency, not from the date the collector acquired the debt.

What is credit utilization and why does it make up 30% of your score?

The formula is simple. Take your current balance, divide it by your credit limit, and multiply by 100. A $2,000 balance on a $5,000 Capital One card equals 40% utilization, which actively suppresses your score. The fix is to pay the balance down before the statement closing date. That is the date the lender reports your balance to the bureaus, not the payment due date. Paying by the closing date produces a lower reported balance, which lowers your utilization ratio, which improves your score within one cycle.

Carrying a small balance does not help your score. This is one of the most persistent myths in credit. A zero-dollar balance reported at statement close is better for your FICO score than a $20 balance. Pay in full. Pay before the closing date.

Does closing a credit card hurt your credit score?

Yes, in most cases. When you close a card, you lose the available credit limit it provided. Your total available credit drops. Your utilization ratio rises on the remaining open cards, even if your balances stay the same. If you have a $4,000 balance spread across cards with a combined $12,000 limit, your utilization is 33%. Close a card with a $3,000 limit and no balance, and your utilization instantly jumps to 44% on the same $4,000 balance. The card you closed also begins aging out of your average account age calculation, which affects the length-of-history factor. Do not close cards unless there is a compelling fee-related reason.

How does the length of your credit history affect your score? (15%)

For Houston residents who are new to the United States or who completed a bankruptcy in the past few years, thin file is the primary issue. A thin file means your credit history is too short or too sparse for FICO to generate a reliable score. The solution is to open accounts that report monthly, use them responsibly, and wait. A secured credit card from a local credit union or a credit-builder loan from a Houston-area community bank adds reporting history without requiring existing credit to qualify.

The most important rule for this factor: never close your oldest account. Even if you stopped using a credit card from 2010, keeping it open preserves both the account age and the available credit limit. The annual fee, if any, should be weighed against the score value the account provides. For most people, the score value wins.

What is credit mix and how much does it matter? (10%)

Revolving accounts carry a balance that changes month to month. Credit cards are the most common. Installment loans have a fixed payment over a fixed term. Your car loan, mortgage, and student loans are installment accounts. Open accounts must be paid in full each month, like a traditional American Express charge card.

FICO does not require all three types. It rewards having more than one type when you manage each responsibly. If you only have credit cards, a single credit-builder loan from a Texas credit union adds an installment account to your mix at minimal risk. What you should never do is open an auto loan or personal loan for the sole purpose of improving your credit mix. The hard inquiry, the new account's impact on average age, and the debt obligation all hurt more in the short term than the mix improvement helps.

How do hard inquiries affect your credit score? (10%)

When you apply for a credit card, personal loan, or mortgage, the lender pulls a hard inquiry. When you check your own score on Credit Karma or through Experian, that is a soft pull. Soft pulls are invisible to lenders and do not affect your FICO score in any way, on any model, ever.

The rate-shopping window is critical for Houston homebuyers and car buyers. FICO's current models give you a 45-day window to apply with multiple mortgage lenders or auto dealers without each application counting as a separate inquiry. Older FICO versions use a 14-day window. Because mortgage lenders in Houston predominantly use the older FICO 2, 4, and 5 models, applying to multiple lenders within 14 days is the safer window to protect your score.

Does checking my own credit lower my score?

No. Checking your own credit report or score at AnnualCreditReport.com, through Credit Karma, Experian, or any monitoring service, is always a soft inquiry. It has zero effect on your FICO score. There is no such thing as checking your score too often. Pull it as frequently as you want. The only pulls that matter are the ones lenders make when you apply for new credit.

Which FICO score version do Houston mortgage lenders actually use?

This single fact is the most important thing on this page for any Houston resident preparing to buy a home. The score you see on Credit Karma is VantageScore 3.0. The score you see on Experian's free app is FICO Score 8. Neither of those numbers is what your mortgage lender pulls. They pull FICO 2, 4, and 5, which are older scoring models that treat certain negative items, particularly paid collections and medical debt, with more weight than the newer models do.

The practical difference is real. A Houston borrower with a 650 FICO Score 8 might have a 615 mortgage score. That gap is the difference between qualifying for a conventional loan and being pushed toward FHA. It is the difference between a 6.5% rate and a 7.2% rate. On a $280,000 Houston home, that rate gap costs roughly $165 per month over the life of the loan.

If Credit Karma shows 650 but your mortgage lender quotes a much lower score, now you know why. The fix requires working on your FICO 2, 4, and 5 scores specifically. That means focusing on the payment history and collections factors that those older models weigh most heavily. Paying down utilization helps both new and old FICO models. Removing collection entries helps old models the most.

Which credit score factor can Houston residents improve the fastest?

Here is the speed ranking for all five factors. Utilization moves in 30 days when you pay down balances. Hard inquiries age off the report in two years and stop affecting scoring after 12 months. Payment history improves over 12 to 24 months as positive on-time history accumulates and older negative marks age. Credit history length improves over years. Credit mix changes over months when you add a new account type, though the short-term cost usually outweighs the long-term gain.

If payment history or collections are dragging your score, that is a different process. Collections and late payments require a dispute strategy under the FCRA. A collection entry with an inaccurate date, an unverifiable owner, or an inflated balance is removable whether or not the underlying debt has been paid. That removal produces a larger score increase than any utilization paydown can, because it targets the 35% payment history weight directly.

The fastest combined strategy for Houston residents: reduce utilization below 10% on all open cards this month, then address collections and late payment entries through FCRA disputes. Those two moves together, done in the right order, produce faster results than any single action taken alone.

Frequently Asked Questions About FICO Score Calculation