What a credit score is actually made of
A FICO score is five weighted parts: payment history 35%, amounts owed 30%, history 15%, new credit 10%, credit mix 10%. What each one measures.
Most FICO scores range from 300 to 850. FICO defines these bands: below 580 is poor, 580 to 669 is fair, 670 to 739 is good, 740 to 799 is very good, and 800 or more is exceptional. Each lender sets its own criteria. Your score alone does not determine approval.
The five components
- Payment history, 35 percent. Whether past accounts were paid on time, across both revolving credit like cards and installment credit like auto loans and mortgages.
- Amounts owed, 30 percent. Your total balances relative to the credit available to you.
- Length of credit history, 15 percent. How long your accounts have been open.
- New credit, 10 percent. How many accounts you have opened recently. Multiple inquiries within a short window, typically a few weeks, usually count as a single inquiry when you are shopping one loan.
- Credit mix, 10 percent. The blend of loans, credit cards, retail accounts and finance company accounts you manage.
The practical takeaway is that payment history and amounts owed together account for 65 percent of the score. If you only have attention for two things, those are the two.