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What Determines My Credit Score?

A credit score is one of the most important numbers you’ll ever need to know in life. A good credit score can make things like taking out a mortgage or buying a new car much cheaper than if you have a bad score. Still, events outside of your control can harm your credit score, such as getting fired from a job and losing your income. To start fixing your score, first you’ll need to know what determines it.


The types of credit you use makes up about 10% of your score, according to the Fair Isaac Corporation, the company that calculates the FICO score. Types of credit include credit cards, installment loans, and mortgages, just to name a few.

New credit also accounts for about 10%, and includes recently opened accounts, how many times you’ve inquired about your credit score, and reestablishing your credit history after past problems. Things like opening new credit cards can have a negative effect on your score if done too often.

Length of credit history, which is exactly what it sounds like, comes out to 15% of your credit score.

The last 65% falls into two categories: amounts owed, 30%, and payment history, 35%. Amounts Owed takes the amount you owe on individual debts and as a whole into account. If you’re spending more than you’re paying off, this will result in a negative effect.

Payment history includes account payment information, bankruptcy, overdue payments, and the amount of time since you’ve missed a payment. This one is pretty simple to keep a positive score: make payments on time. For more information about credit scores or financing, please don't hesitate to contact our Finance Team here at Nick Nicholas Ford Lincoln today!

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