essential to achieving financial goals.

Five major factors have an influence on your Credit Score:

  1. Payment history (35 percent)
  2. Level of debt/credit utilization (30 percent)
  3. The age of credit (15 percent)
  4. Mix of credit (10 percent)
  5. Credit inquiries (10 percent)

Payment History

Your payment history is a record of your payment behavior on all credit accounts, such as credit cars and loans. Make sure that you pay on time, every time.


Payment History Components


What goes into your payment history?


  1. Payment information on various types of accounts, including credit cards, retail accounts, installment loans and mortgages.
  2. The appearance of any public records, such as bankruptcies, and suits, as well as collection items and delinquencies.
  3. How long overdue any payments have become. 
  4. The amount of money still owed on accounts or collection items. 
  5. How much time has passed since any delinquencies, public records or collection items.
  6. The number of past due items listed on credit report. 
  7. How many accounts are being as agreed.


Credit payment history determines 35% of your FICO Credit Score.

Credit Utilization

Your utilization rate, or balance-to-limit ratio, is simply the total of your credit balances divided by the total of your credit card limits, generally expressed as a percentage.
Learn how to Calculate Your Credit Utilization: To determine your credit utilization, log in to each of your credit card accounts and gather the following information:

  • Credit Limit
  • Current Balance


Add up the credit limits across all your cards, then separately add up the balances, too. Next, divide your total balance by your total credit limit, and multiply by 100 to get a percentage.


Make sure that you use no more than 30% of your available credit.

Credit Utilization determines 30% of your Fico Credit Score.

The Age of Credit

Age of credit history refers to the length of time you've been using credit. Look at the age of your oldest and newest accounts and the average age of all your accounts to determine the impact that age of credit history will have on your credit scores.

There are three primary ways of FICO scoring formula looks at your length of credit history:

  1. Average account age: total number of months since each account was opened, divided by the number of accounts.
  2. Oldest account: earliest date opened.
  3. Newest account: most-recent date opened.


The Age of Credit History determines 15% of your FICO Credit Score.

Mix of Credit

Refers to the types of accounts that make up a consumer's credit report. 


Credit Mix determines 10% of your FICO Credit Score.

Credit Inquiries

Credit inquiries are classified as either "hard inquiries" or "soft inquiries". 


Only hard inquiries have an affect on your FICO score.


Soft inquiries are all credit inquiries where your credit is NOT being reviewed by a prospective lender. These include inquiries where you're checking your own credit, credit checks made by businesses to offer you goods or services (such as promotional offers by credit card companies), or inquiries made by businesses with whom you already have a credit account. 


Hard inquiries are credit inquiries where a potential lender is reviewing your credit because you've applied for credit with them. These include credit checks when you've applied for an auto loan, mortgage or credit card. Each of these types of credit checks count as a single credit inquiry.


A FICO score takes into account only voluntary inquires that result from your application for credit. A FICO score does not take into account any involuntary inquiries made by businesses with whom you did not apply for credit, inquiries from employers, or your own requests to see your credit report.


Four examples of when to expect hard credit inquiries are:

  1. Applying for a credit card or loan: Individuals applying for consumer loans like auto loans, mortgages, and student loans or a personal credit card, can expect to receive hard inquiries credit reports. For these types of transactions, lenders and creditors generally want to review your full credit history to evaluate your creditworthiness.
  2. Applying for a business loan: Business owners looking to access funds through a Small Business Administration (SBA) loan or working capital loan, will typically see hard inquiries on their personal credit report; business credit reports aren’t penalized for inquiries because anyone can pull a business report with the address and name of the business
  3. Applying for other services: A new service including utilities, television, or cellphone contract usually means a new monthly payment. A hard credit check is likely in this situation to determine if you can afford a new financial obligation
  4. Requesting a credit limit increase: Increasing your credit limit is comparable to applying for a credit card; typically, credit providers will want to look over your full credit history to ensure you can manage a higher limit.


Credit Inquires determine 10% of your FICO Credit Score.

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