What factors make up your credit score?
FICO scores are calculated based on the following criteria:
Payment History is 35%
- Pay all your debts on time
Amounts owed is 30%
- Credit utilization ratio (lower the percentage, the better)
Length of Credit History is 15%
- The longer you have been using credit responsibly, the better
Credit Mix is 10%
- It’s best to have a variety of accounts such as revolving debt (credit cards) & installments (loans)
New Credit is 10%
- Refrain from applying for new loans and credit cards in a short period of time. Lenders will think you are desperate for credit.