How the FICO Credit Score Is Composed

credit score showing on a cell phone
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One of the most commonly used scoring tools is the FICO credit score. It’s important to understand how the FICO credit score is determined. There are just a few pieces to the puzzle, and focusing on these pieces can help you improve your FICO credit score.

Where Does the FICO Credit Score Come From?

Your FICO credit score is calculated by the Fair Isaac Corporation. Fair Isaac looks at information in your credit report and crunches the data using a proprietary formula.

Note that your FICO credit score is only as good as the information that Fair Isaac has available. If there is incorrect or out-of-date information, it will affect your ​FICO credit score.

How the FICO Credit Score Is Composed

To create the FICO credit score, Fair Isaac looks at your information in a few different ways, using the following categorizations and percentage weights. 

FICO Credit Score Components:

  • 35 percent payment history
  • 30 percent amounts owed
  • 15 percent length of credit
  • 10 percent new credit
  • 10 percent type of credit

If you’re trying to improve your FICO credit score, you may need to focus on one or more of the components above. The next few pages help you take actions to improve each of these areas.

There’s More to You Than Your FICO Credit Score

Before you break your back trying to manage your FICO credit score, remember that lenders may look at other factors besides just your FICO credit score.

For example, you may be able to show the lender that you just got a better paying job that will allow you to cover all your debt payments – this is not something that will appear in your FICO credit score.

Improve Credit Scores – Payment History Category

  • Pay your bills on time
  • If you can’t pay on time, notify your lender that you need to work something out

Improve Credit Scores – Amounts Owed Category

  • Keep low balances relative to your credit limit – 30 percent or lower is best.
  • Don’t open new accounts just to lower your used credit capacity – having too much capacity is a risk too

Improve Credit Scores – Length of Credit Category

  • Consider keeping old accounts open if you’ve been a good borrower
  • Start building credit as soon as possible

Improve Credit Scores – New Credit Category

  • When shopping for new credit, keep it all within a short time frame such as 14 days or less
  • Borrowers with a bad history can improve credit scores by opening a new account and managing it responsibly

Improve Credit Scores – Types of Credit Category

In general, you need to know that it takes time and discipline to improve credit scores.

The above rules should become second nature to you. Finally, don’t fall for any promises to improve credit scores overnight (or for a fee). In rare circumstances, you can get legitimate errors removed from your credit reports more quickly than normal (using rapid rescoring), but there's nothing you can do about accurate information.