• 35 percent of the score is based on your payment history. The score is affected by how many bills have been paid late, how many were sent out for collection and any bankruptcies. When these things happened also comes into play. The more recent, the worse it will be for your overall score.
  • 30 percent of the score is based on outstanding debt. How many credit cards do you have that are at their credit limits? The more cards you have at their limits, the lower your score will be. The rule of thumb is to keep your card balances at 25 percent or less of their limits.
  • 15 percent of the score is based on the length of time you've had credit. The longer you've had established credit, the better it is for your overall credit score.
  • 10 percent of the score is based on new credit. Opening new credit accounts will negatively affect your score for a short time. This category also penalizes hard inquiries on your credit in the past year. Hard inquiries are those you've given lenders permission for, as opposed to soft inquiries, which include looking at your own score and have no effect on the score.
  • 0 percent of the score is based on the types of credit you currently have. It will help your score to show that you have had experience with several different kinds of credit accounts, such asrevolving credit accounts and installment loans.

Where do you Rank?

Most lending institutions use a score referred to as a FICO score. This has a range of 300-850. Many consumers will see a score issued online along with thier consumer credit report that has a range that exceeds 850. This is not a true FICO score. FICO does not exceed 850. Most consumers will not have any problem getting approved for the lowest available rates as long as their FICO score is above 720. So do not get frustrated if you are unable to crack the 800 number at any point.

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