Credit Score Factors: The Complete Breakdown

Have you ever wondered what goes into calculating your credit score? It's not a secret formula locked away in a vault. Credit scores are calculated based on the information in your credit report, and the models that generate them, like FICO and VantageScore, are transparent about the factors they consider most important. Understanding these factors is the first and most critical step toward taking control of your financial health.
This article provides a complete breakdown of the factors that influence your credit score, explaining how they are weighted and what you can do to improve them.

The Building Blocks of Your Credit Score

While the exact weighting can vary slightly between different scoring models (like FICO and VantageScore) and even between individuals, the core components remain consistent. Here’s a look at the five key factors that determine your FICO score, the most widely used credit score, along with their general importance.

1. Payment History (35% of your FICO Score)

This is the single most important factor. Lenders want to know if you have a reliable track record of paying your bills on time. A history of late payments, delinquencies, collections, or bankruptcies will significantly lower your score. Even a single late payment can have a noticeable impact, and the later the payment, the more damage it does.

According to FICO, "The first thing any lender wants to know is whether you've paid past credit accounts on time. This helps a lender figure out the amount of risk it will take on when extending credit" [1].

2. Amounts Owed (30% of your FICO Score)

This factor, often referred to as credit utilization, looks at how much of your available credit you are using. A high credit utilization ratio—meaning your balances are close to your credit limits—can be a red flag to lenders, suggesting you might be overextended and at a higher risk of defaulting. Most experts recommend keeping your overall credit utilization below 30%.

It’s not just about credit cards; this category also considers the total amount of debt you carry across all your accounts, including installment loans like mortgages and auto loans.

3. Length of Credit History (15% of your FICO Score)

A longer credit history generally has a positive impact on your score. This factor considers the age of your oldest account, the age of your newest account, and the average age of all your accounts. A long history of responsible credit management provides lenders with more data to assess your risk. This is why it's often advised not to close old credit card accounts, even if you don't use them frequently.

4. Credit Mix (10% of your FICO Score)

Lenders like to see that you can responsibly manage different types of credit. This factor considers your mix of revolving credit (like credit cards) and installment loans (like mortgages, auto loans, and student loans). While it's not necessary to have one of each, having a healthy mix demonstrates your ability to handle various forms of debt.

5. New Credit (10% of your FICO Score)

Opening several new credit accounts in a short period can be seen as a sign of risk. This is because it may indicate that you are in financial trouble and are seeking out credit to stay afloat. Each time you apply for new credit, a hard inquiry is typically placed on your report, which can cause a temporary dip in your score. While the impact of a single inquiry is usually small, multiple inquiries can add up.

FICO vs. VantageScore: A Quick Comparison

While the factors are similar, FICO and VantageScore assign slightly different weights to them. Here is a high-level comparison:

As you can see, both models place the heaviest emphasis on your payment history and how much debt you carry. VantageScore gives slightly more weight to your credit history and experience ("Credit Depth") and less to recently opened accounts.

Conclusion: Knowledge is Power

Your credit score is not a fixed number; it's a dynamic reflection of your financial habits. By understanding the factors that shape it, you can take proactive steps to build a stronger credit profile. Focus on the fundamentals: pay your bills on time, every time; keep your credit card balances low; and be strategic about opening new accounts. These actions are the foundation of a healthy credit score that will open doors to your financial goals.

[1] myFICO. "What's in my FICO® Scores?"

[2] TransUnion. "What are the credit score factors?"