Your FICO credit score is made up of five factors of varying importance. The weighted importance of the categories listed below are averages. For some people — such those who haven’t been using credit for long — certain categories may count more heavily.
PAYMENT HISTORY: 35 percent
If you have any late payments, your score will take into account how late you were, how much was owed and how many instances there were. A late payment of 30 days or more stays on your report for seven years.
CREDIT UTILIZATION: 30 percent
This measures your outstanding balance against your available credit. The lower your credit usage, the better.
LENGTH OF CREDIT HISTORY: 15 percent
If you want to close some credit cards, consider keeping the card you’ve had the longest. Lenders want to see that you have a track record of handling credit.
NEW CREDIT: 10 percent
An application for new credit creates an inquiry from the bank on your report. Inquiries can be red flags because they suggest you’re in need of credit.
TYPES OF CREDIT: 10 percent
This looks at whether you have a mix of different types of credit, such as installment loans or mortgages. It’s good to have a history of revolving accounts, such as credit cards.
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