The 5 Components of Your Credit Score

The 5 Components of Your Credit Score
  • Opening Intro -

    Consumer credit scores are a big deal, but not usually something Americans think about until they need to take out a mortgage, refinance a loan or obtain an automotive loan or other credit.

    Often, consumers won’t know their credit scores unless there is a problem.

    And that problem is difficulty obtaining new credit or getting that credit at a favorable rate of interest.


(And what they mean to you)

You can obtain free copies of your three credit reports once annually by visiting Consumer reports are compiled by Experian, Equifax and TransUnion, but only Experian will provide to you a credit score which is based on the Fair Isaac Corporation or FICO score. You’ll be charged a fee to obtain your score, but it can certainly be worth it if you’re looking to make a major purchase, such as buying a house.

Incidentally, Experian says that scores of 700 or higher reflect a consumer who exercises “good credit management.”[1] Most consumers have scores ranging from 600 to 750, but the complete scoring range is from 300 to 850.

There are five components of your credit score with each piece of the pie adding up to 100 percent. gives weight to each component; each of the credit reporting companies uses a similar formula, thus your scores should be nearly the same from all three companies and for MyFico.

1. Payment History (35 percent) — The longer you have had credit, the better this reflects on your credit score. Lenders look for a trail and by having several accounts open and handled properly, you’ll benefit. Conversely, if there are judgments against you including liens, bankruptcies and delinquencies, then this will work against you. Older delinquencies are not as significant as more recent problems. Creditors also look at the number of past due items on file and number of accounts paid as agreed.[2]

2. Amounts Owed (30 percent) — When taken into consideration with payment history, the amount you owe credits equals almost two-thirds of your credit score. By itself, it is 30 percent of your score and creditors look at several things including the types of accounts you have open, amount of debt you owe, what you owe on installment loans and how much of that equity line you’ve tapped.

3. Length of Credit History (15 percent) — While lenders are interested in payment history, they also want to know how long your accounts have been open, whether you’re actively using them and the length of your accounts. For example, if you’re in the 17th year of your 30-year mortgage, that information helps. If you’re new to the world of credit, then that will keep your credit score down until you get established.

4. New Credit (10 percent) — A credit inquiry and new account opened will be noted by creditors. Open up too many accounts or at least make a bunch of inquiries in a short amount of time can work against you.

5. Types of Credit Used (10 percent) — Not every credit account is weighed the same. Mortgages are weighted differently than installment loans which carry a different weight from credit cards and other unsecured debt.

Fair Isaac is quick to point out that all five components matter and that there is “no one piece of information or factor alone will determine your score.” However, if you have a major hit, such as a foreclosure, expect that several components to be affected with your overall credit score reduced accordingly.


[1] Experian: What is a Good Credit Score?

[2] What’s in Your FICO Score?

Chart: Fair Isaac Corporation


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Categories: Credit Reports

About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Matt's Musings", his personal blog. Matt covers campus, consumer, business and financial topics on various websites and blogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".