What Makes up a FICO Credit Score?

On our Credit Restoration page we outlined the categories used to derive a credit score.  To review, those categories are the following…

  1. Payment History – 35%
  2. Amount Owed – 30%
  3. History of Credit – 15%
  4. Inquiries – 10%
  5. Account Diversity – 10%

Today we are going to take a deeper look inside each of these categories including a few credit building tips that will show you how to improve your credit score for FREE!  As always, if you are looking for assistance on how to repair your credit quickly, effectively and at a low cost, be sure to contact us.

Payment History

Credit Score Payment HistoryThese factors make up 35% of the FICO score.

  • Payment info on specific types of accounts (credit cards, installment loans, mortgage, etc.)
  • Negative public records (bankruptcy, suits, liens, judgements, wage garnishments etc.)
  • Collection items, and/or past due items
  • Severity of delinquency (how long past due)
  • $ past due on delinquent or collection accounts
  • Recency of delinquency, public records and collection items.
  • # of past due items on file
  • Number of accounts paid as agreed


Credit Score Amount OwedAmount Owed

Debt amount makes up 30% of the score, and also impacts the debt-to-income (DTI) ratio another tool lenders use when qualifying a loan application.

  • $ owed on accounts (including specific types)
  • # of accounts with balances
  • Lack of a specific type of balance, in some cases
  • Credit Utilization Rate (CUR) – The percentage represented by the amount owed on an account divided by the credit limit of the same account.  This also applies at the aggregate level for all revolving lines of credit for a consumer.


Credit Score - Credit History

Length of Credit History

This is the part of your credit profile that you have no physical control over.  The sooner you establish good credit practices the better.

  • How long accounts have been opened
  • How long accounts have been opened (measured by specific type of account)
  • Time since last account activity



Credit Score Inquiries

Inquiries & New Credit

Only 10% but the easiest to control

  • Number of recent credit inquiries (all credit pulls within 30 days count as 1 – for rate shopping)
  • Time since last credit inquiry (month-to-month)
  • # of recently opened accounts (by amount & type)
  • Time since recent account opening(s), (by type)
  • Re-establishment of positive credit history following past payment problems



Account DiversityCredit Score Account Diversity

Account mix makes up 10% of the FICO score and acts as a mechanism to help prevent the manipulation of scores.

myFico.com defines Account Diversity as…

“Number of (presence, prevalence, and recent information on) various types of accounts (credit cards, retail accounts, installment loans, mortgage, consumer finance accounts, etc.)”

Having a balance between a mortgage, auto loan and revolving lines of credit on your profile will help this portion of the score.

As Pat Riley told Lebron James “The main thing is to keep the main thing the main thing.”  The major areas to focus on when looking at your own credit score is Payment History and Balances Owed as they account for two thirds of the total rating.  Having a basic understanding of how to keep the others in line will suffice.

The major proactive steps you can take in order to improve your credit profile are as follows…

  1. Pay future bills on time
  2. Keep CUR to between 20%-40%
  3. Limit inquiries or new lines of credit
  4. Ensure accuracy of your credit report

The first 3 are fairly straightforward but when it comes to ensuring accuracy of your credit report or repairing your credit, the specific actions can be a little confusing and tricky.  The good news is that challenging your reports for incorrect or out of date items, will impact practically every area of this credit score pie chart.  Legally the 3 credit bureaus (Equifax Transunion and Experian) are required to verify items with creditors.  Agencies and companies reporting negative or positive items have 30 days to respond and if they do not the credit bureaus must remove the items from your report.

Studies have shown that 79% of reports have incorrect items with 25% of those items serious enough to impact approval in lending.  Given these staggering statistics it is worth taking a look at your report rather you choose to challenge or not.

Be sure to visit our blog for more information on how to repair your credit, on your own, with little out of pocket cost.  If you would prefer to hire a professional to assist you, contact us for a free consultation and we can point you in the right direction.

If you would like to speak with one of our specialists about enrolling in a particular program, or just need some help deciding which solution is right for you, contact us at 888-609-1854 | Opt. #1, or fill out the contact form to the right.

One comment

  1. Great stuff here. This motivated me to actually check out my credit score and I did find some incorrect info which I have put a dispute request in for. Thanks TDN!!!


  1. Secrets For Repairing Credit After Bankruptcy - Total Debt Network | Total Debt Network - [...] to creditors and lenders.  This is a good thing from a credit score standpoint.  Remember from What Makes Up ...

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