5 Factors that Determine Your FICO Score

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By Lynnette Khalfani-Cox, The Money Coach

You hear a lot about your credit score being a strong factor behind your eligibility for credit cards, car loans or mortgages, but do you know how the Fair Isaac Corp., the company that calculates your FICO credit score, determines this number?

Here are the basics:

Your FICO credit score ranges from 300 to 850 points; the higher your score the better. A high FICO score means you’ll get the best rates and terms on all kinds of loans. You’ll also save a bundle on expenses like auto insurance and life insurance.

The 5 Factors
Under Fair Isaac’s credit scoring model, your FICO credit score is based on five primary factors:

35% of your score is based on your payment history
30% of your score is based on the amount of credit you have used
15% of your score is based on the length of your credit history
10% of your score is based on your mix of credit and income
10% of your score is based on inquiries and new credit you’ve taken on

Learning how to “work” the FICO credit scoring system can work in your favor. Check back here for my “6 Guidelines to Help You Maximize Your Credit Score.”

Here’s How to Get Your FICO Credit Score Free (askthemoneycoach.com)

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