You’ve likely heard forever how your credit score is so very important, but has anyone told you what goes into credit score calculation?  Today, however, there’s pretty little you can do without considering your credits score first. You can’t, in most states, even rent an apartment if you have a poor credit standing.

So, you have to ensure at every move you make financially, positively affects your credit score. But what are the factors that determine your credit score? What are these things that you do that factor in your credit score calculating?

We’ve done some research into this whole credit score business and have discovered information you’re going to want to know. This information will help you make the right financial decisions to boost your score instead of the wrong ones that will send it spiraling out of control.  

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Payment History

The first determining factor to your credit score is what your record of paying off debts is. Not only the current ones that you have but the ones in your past as well. You need to have an impeccable in paying your debt if you want your score to go up.

You need to understand that even one missed payment in your past has the ability to negatively impact your score. If your creditor needs some sort of assurance that you will pay your debt. One failed payment gives them an idea that you may abscond with the credit they lend you.

Mathematically, your payment history accounts for 35% of your score. That’s according to FICO® Score and as you know by now it is the most used credit score by most lenders today.

Credit Utilization

Another 30% of your FICO Score is determined by your credit utilization. That means that other than your payment history, this is the other factor that you should take into account. Credit utilization is the divided total credit revolving around the credit in use.

In simple terms, it is how you choose to utilize the credit that you have been offered. This determines how reliable you are with the credit you’re being extended by the current lenders you’re using.

You need to ensure that you are using your available credit prudently. And not just about you borrow, but how you’re managing that debt at the moment. This can be detrimental if you have a number of credit avenues and you fail to keep up with them.

Credit History Length

The longer you have maintained your credit the better for your credit score. For example, if you have held on to a certain credit card for quite a while that means you are doing something right and it plays a role in your score.

It is generally assumed that if you are poor with managing your credit, you won’t hold onto a good credit score for long. Your FICO® Score is calculated by the average age of your active credit accounts. It includes how long you have held your old and your new credit accounts.

Your credit history length accounts for around 15% of your credit score according to FICO Score.

New Credit

The other determining factor in your credit score is your new credit. The more new credit accounts you open, the more likely your score is to go down. For example, if you open an account this week and another next week, creditors consider you a risk.

In essence, it shows that you can be stretched by the other creditors and fail to pay many if not all of your creditors. Any new credit accounts for around 10% of your FICO Score. Avoid opening many credit accounts if you still are in other debt.


Credit Mix

The last factor is what credit you are carrying around like car loans, student loans, credit cards among other credits. That is what is referred to as credit mix and this usually happens to people with high credit scores as they borrow from all avenues.

If you manage these debts well, you will have a 10% increase in your FICO Score. If not, that accounts for a loss of the same percentage in your credit score.


In percentage that is how your credit score is calculated by the likes of FICO Score. Meaning each one plays a huge role in your credit score in the end. The factors should all be considered when you are looking at your spending and borrowing habits.