How is my FICO Credit Score Calculated?

FICO Credit score breakdown chart

Your FICO credit score report is broken into 5 Parts.
Browse here to learn more about each.

Types of Credit

When your FICO score is being calculated, the governing agency is checking out the types of credit that you currently have open. There may be more than what I have listed below, but the idea is that if you owe money on something, then the type of loan will be accounted for in your score report. Here are some examples:

  • Car Loans
  • Mortgage Loans
  • Student Loans
  • Credit Card Debt
  • Personal Loans
  • Retail financing

New Credit Opened

The next thing that will be reviewed is your “New Credit Opened.” This simple means the newest accounts that have been created in your name. They want to check if you have recently taken on any more debt that could affect the ability to make payments on your current notes. 

Length of Credit

The Length of Credit is an important factor when it comes to your FICO score. Older average credit accounts will have a positive impact on your credit score. That means it is typically wise to stick with a financing company for as long as possible when it comes to credit. Do your research on credit cards and make sure they will be a good fit for you before opening them up. Then, after you have the account, stick with it for as long as possible & you will see incremental increases on your credit score over the years. 

Payment History


Duh! Right? It seems obvious to most, but many people miss payments on their various forms of debts. When you miss a payment, your FICO score can take a hit. 

Many lenders are nice enough to refrain from reporting your first miss – especially when you have made on time payments for a while. However, if you miss a couple of payments, then the credit bureau will catch wind of that and our credit score will begin to drop. 

Lenders love people who pay back their debt. By missing payments, you are telling lenders that you aren’t responsible with your borrowing & they are less likely to lend to you on future loans. This can be especially painful if it effects your ability to get an important milestone loan…. LIKE A HOME LOAN!

The Lesson here – take care of your debts and make payments on time. You never know when a poor payment history will negatively effect the something you really want.

Amount You Owe

The Amount You Owe is another aspect of the FICO credit report. It is another important one when showing lenders your responsibility as a borrower. The more responsible you are, the more opportunities you will have to get loans for milestone purchases like a new home, car or investment property. 

A general rule we have always abided by is to keep your credit card utlization under 30% of your total limit. Reporting agencies love when you have a balance on your cards, but not when that balance gets too high. If any of your more common debts like credit cards and retail purchases begin to get a little too high, make a budget to get them back below 30% of your limits & you should see a nice increase to your FICO credit score.

We hope this has been helpful. If you have any questions or would like some help getting your debt under control, let us know. We can either help you get on track to raise you score & get you ready for your next mile stone purchase… like a new home 😉