FICO Score Calculation

How do I figure my FICO score?

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FICO Score
Bill's Answer: Answered by Brad Stroh

The details of credit scoring models used by the major credit bureaus are closely guarded trade secrets, owned by the companies that have developed the scoring models.

The best known and most widely used scoring model, the FICO score, which judges your credit on a scale from 300 to 850, was developed by the Fair Isaac Corp., and is used with slight variations by the three major credit bureaus: TransUnion, Experian, and Equifax. Because the complexity of the statistical analysis used in credit scoring, and the fact that the scoring algorithms are not publicly available, you cannot precisely figure your own credit score. However, Fair Isaac has made public the general criteria it uses in calculating credit score. So based on information in your credit report, you should be able to tell which items in your report are helping or hurting your credit score.

There are five key factors that go into calculating your credit score, with certain items carrying more weight than others. These factors are as follows:

1. Payment history

Payment history counts for approximately 35% of a score. It is the most heavily weighted factor used in calculating your credit score. Consistently paying your bills on time has a positive influence on your score, while late or missed payments will hurt you in this area.

If you have delinquent payments, the older the delinquency the less the negative impact on your score will be. Collection accounts and bankruptcy filings are also taken into consideration when analyzing your payment history.

2. Total debt and total available credit

Total debt and total available credit counts for about 30%. This section looks at how much debt you have compared to the total available credit on your accounts. If all of your accounts are maxed out, you will be considered a poor credit risk, because it appears that you are struggling to pay off the debt you have already incurred.

If your account balances are relatively low compared to your available credit, this part of the risk analysis should help your overall credit score. The score calculation also looks at these two factors independently.

Having too much available credit, whether you have used it or not, could hurt your credit score, as statistical studies have shown that people with excessive amounts of available credit are a higher credit risk. Unfortunately, the bureaus do not define exactly what they consider excessive, so best tip is to use credit conservatively and to keep your debt-to-credit limit ratio low.

3. Length of positive credit history

Length of positive credit history counts for about 15%. The longer you maintain accounts in good standing, the better your score will be. This shows that you are able to make a long-term commitment to a creditor and are consistently responsible about making your payments.

4. Mix of types of credit

Mix of types of credit counts for approximately 10%. Having several different types of credit, such a credit cards, consumer loans, and secured debt, will have a positive influence on your credit score. Having too much of one type of credit can have a negative impact.

5. New credit applications

The number of new credit applications you have recently completed accounts for about 10% of your score. Applying for too much new credit in a short time period makes indicates that you could be credit risk, as you may be desperately trying to keep your head above water. The models make an exception for people who are shopping around for a loan, so if you are simply applying to see who can give you the best rate on a new loan, you need not worry too much about damaging your credit score.

While you cannot calculate your own credit score accurately, you can review your credit report on the five factors named above to get an idea of whether the accounts listed on your credit report are hurting or helping your credit score. You can then take action to improve any potential problems, such as paying down your balances or paying off collection items.

Generally speaking, if you are carrying more than $5,000 in credit card debt or are struggling with credit card or revolving debts, you should solve this problem first. Apply for help with one of Bill’s approved debt help partners.

Items not in a FICO score

Factors such as age, sex, income, and length of employment have no direct affect on your credit score, and are not considered when the bureaus calculate your score. Keep in mind that for most lenders, your credit score is only one aspect, albeit an important one, of your overall "credit worthiness," meaning the creditor's view of your ability to repay a loan.

Your income, for example, is not considered in the calculation of your FICO score, but most lenders will ask what you earn to analyze your ability to repay the loan. Even if you have an 800 FICO score, if your income is only $10,000 per year, a lender will probably not loan you a large sum of money, because despite your exemplary credit habits as measured by your FICO score, the lender can see that you probably cannot afford to repay the loan.

Credit score range: What is a good FICO score?

FICO scores range between 300 and 850, with the average U.S. credit score being 723.

According to Fair Isaac, a credit score above 700 places you in the low credit risk category (perfect or "A" credit), meaning you should qualify for the best interest rates, depending on other factors such as income. A score between 690 and 600 is considered a moderate credit score, and many people say you are "Alt-A" if you are between about 650-680. This means that while you will not receive the best interest rates, you should still be able to borrow at reasonable rates.

A score below 600 generally means that you will be considered a relatively high credit risk, and your interest rates will probably be quite a bit higher than a consumer with a better credit score. A score below 550 is generally considered poor credit; a score this low will likely prevent you from obtaining many loans, and those you can obtain will carry high interest rates and fees.

There are several other scoring models, such as the Vantage Score and the Beacon score, which lenders use when making loan decisions, so the ranges mentioned above are not absolute. However, Fair Isaac is the most common scoring model, so the information I provided should serve a good guide.

How to Improve a FICO Score

Here are five steps to improve a credit rating:

  1. Pay your debts on time. Delinquencies harm a credit score.
  2. Keep revolving lines below 25% utilization. Do not “max out” any loans or cards.
  3. Diversify you credit portfolio. If, for example, you have only a Visa, MasterCard, or Discover card, get a department store credit card or card from a gasoline retailer. Make your payments every month. Leave a small balance every once in a while to show that you are able to handle debt on more than one account.
  4. Keep your oldest credit account active. Remember point number three "Length of positive credit history" discussed above.
  5. Pull your credit report and contest any inaccurate information. Follow the dispute procedure to corrected your credit file. Go to the debt self-help center for sample dispute letters. The credit bureaus must follow the rules set forth by Congress in the Fair Credit Reporting Act (FCRA).

If you would like to learn more about credit reports, credit scoring, and what it means to you, I encourage you to explore the wealth of material offered by the credit information page.

I hope this information helps you Find. Learn. Save.



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Comments (59)

Louise P.
Henderson, NV  |  June 15, 2013
My husband was in charge of paying bills. Only problem is I trusted him and everything is in my name. When I found out he wasn't and I took over I realized my % of onetime payments on FICO score is really bad. What is the history length of on time payments and what is a way to improve my % of on-time payments? I've been paying bills on-time for the last year. I was thinking of using my unused personal CC and paying on time.
June 17, 2013
It is difficult to answer your question without knowing more about your situation. See the article Short Sale, Foreclosure & Your Credit Score to see how the time to credit score recovery varies with different types of financial missteps. Please ask follow-up questions you may have on that page.
Chesterfield, MO  |  February 23, 2012
I had several negative items removed from my credit. 1) A tax lien that was paid, 2) A credit account that was in collections that was proven not to be my account, 3) A small medical bill that was paid in full. As a result of these then my outstanding balances were also reduced. I did NOT hire a company to remove these charges. My credit scores went down. How is this possible??
February 23, 2012
Four questions for you to help better understand your situation:
  1. Exactly which credit score are you looking at? There are two:
    • FICO (range 300 to 850)
    • Vantage Score (range 501 to 990)
  2. From which credit reporting agency are you getting your scores? There are three:
    • Experian
    • Equifax
    • TransUnion
  3. What was your starting score?
  4. What is your current score?

One tricky item is the credit reporting agencies call FICO scores different names, even though the scoring software is the same. Here are the brand names we found for a FICO score:

  • Advanced Risk Score
  • Pinnacle
  • Precision
  • Beacon
  • Empirica

Please reply with your four answers below.

Deb A.
El Paso, TX  |  January 23, 2012
I am an authorized user on several of my mother's accounts. Her accounts are very close to maxing out. If I remove myself from these accounts how will this effect my score (I've been on these accounts for several years about 9-10 years)?
January 23, 2012
Authorized user accounts do not necessarily affect your score. How your score will be affected, if you have yourself taken off your Mom's accounts, depends on whether those accounts were affecting your score to start. If they were being counted towards your score, then what else will remain on your report, once those accounts are removed, will be the key to determining your score. You should work to have at least three active tradelines in your own name, that you keep in good standing.
Greg P.
January 03, 2012
It all seems rather arbitrary to me. Though my credit report shows the same information on Equifax, Experian and Trans Union, the three scores routine vary drastically. As an example, as of today, I'm at 779 on Trans Union, 700 on Equifax and a pathetic 683 on Experian. My total credit card debt at the time was $3.00; I guess Experian thought I wasn't good for it. ;)
January 04, 2012
It is not arbitrary, but can appear that way. Each bureau has its own proprietary scoring model that weighs the factors on your report differently. There is usually not such a wide range between bureaus, when they are reporting exactly the same accounts. It is usually due to one bureau reporting some account or public record that is not reported by another bureau.
Greg P.
January 04, 2012
I understand and agree about the fact that one bureau may hold differing information; however, I use a credit monitoring service and checked my file as of the beginning of January, identical info on all. For some reason Experian has always graded me lower, but all one can really do is pay on time and keep an appropriate and healthy balance of open credit accounts. To some degree, like it or not, we are at their mercy.
Le B.
December 03, 2011
We are not legally married however, I am an authorized user on my boyfriend's credit cards and he is filing for bankruptcy. Does his bankruptcy hurt my credit score in anyway or form?
December 04, 2011
Although an authorized user is not liable for the debt, the transactions made on those cards will affect their score. Therefore, a person without a credit score, or a poor credit score can be an authorized user, in order to bolster their score. Naturally, if that account has negative activity, this will adversely affect the authorized user's credit score. You should have yourself removed from the account as soon as possible.
Sherry N.
Leroy Township, OH  |  November 10, 2011
My credit score is mid 600.I tried to refinance my house but they said i was late 1 time and that was to much What are my chances of getting a home equity loan on my house? My husband is self employed and his income has been bad this year and I don't make over $20,000 but I have about $50,000 in equity in my house
November 13, 2011
Credit Score is one important factor in qualifying for a loan, but not the only one. The lender will also look at your debt to income ratio, which may be too high, if your income has dropped. The lender also looks at the value of your home in comparison to the size of the loan you seek. Read page about minimum credit score for a loan.

Also, before applying for a loan, make sure that you have no late payments. The lender will often re-check your credit, to see that you maintain a clean record between the approval of you application and the closing on the loan.
Kenny P.
Byfield, MA  |  September 16, 2011
i recently tried for a personal loan and was turned down because my fico score was 605 and the credit union told me it needed to be around 640. i do however have bankruptcy on my record about 1 and a half to 2 years ago. My question is if i were to pay off my 3 credit card totaling 1300 dollars how much and how fast would my fico score come up?
September 16, 2011
Probably not increase. The credit score software rewards consistent, on-time payments, and not zero balances. Continue to make more than minimum payments on all of your accounts, and your credit score will improve.
Kevin B.
Marksville, LA  |  January 10, 2012
You stated to her that her score would not improve but how is this true when your credit to debt ratio affects your score. I am lacking 50 points from getting my home loan and was informed I could increase this by lowering my credit to debt ratio. I have two card that I used most of the credit on and are hurting my score. So i would say her credit score would improve it paying down or paying off a card or two.
January 10, 2012
You are correct that your credit utilization, the amount of your available credit that you use, affects your credit score. However, one does not need to pay off one's debts in full each month to have good credit utilization. There is no set number, but the general recommendation is to keep your total debt to 30% or less of your available credit line. Of course, because you are being charged interest, you should aim to not carry balances, if possible.
Sandy G.
Oxnard, CA  |  August 02, 2011
I recently had a derogatory account removed from my credit report and what I want to know is how much will my FICO score increase with the account being removed.
Adrian R.
April 26, 2011
I have two student loans that have been in delinquent status of 180 days back in May 2007. Since then I have never been delinquent on any of my credit payments and have gotten a FICO score of 727 on my Equifax. How long will the student loans hurt my score? Will the delinquent payment reproting drop off after 7.5 years or does it only drop off 7.5 years after the whole loan is paid off?
April 26, 2011
The hiccup you described will be removed from your credit report, by federal law, 7 years from the date of the derogatory event.
David S.
Martinsburg, WV  |  January 29, 2011
i had 6 bills that went to collections that were from 3-5 years ago that had been holding me back from getting a home. I very recently paid all of it off in full and my credit score is 575. I was wondering how long it would be before I saw improvement in credit score? Also how soon would i be able to make a home purchase? would my wives credit 4 debts hold us up?
January 31, 2011
Congratulations on freeing yourself from your delinquent debt! The most difficult part of your journey is over. Well, maybe. It depends on how you feel about waiting.

You mentioned the negative items on your credit report that were dragging down your credit score are gone. Now you can concentrate on the positive actions that boost a credit score.
  1. Continue to pay your accounts on time
  2. Diversify your credit portfolio. If you have no credit cards, get a secured credit card pay it on time.
  3. Keep your oldest account open
  4. Avoid shopping for car loan or mortgage until your score recovers
  5. If you have any current account balances, pay them off to lower your credit utilization ratio

If you can afford a mortgage yourself, then do not include your spouse on the credit application. If your spouse has a low credit score, that will have a negative impact on your application.

Regarding timing, that is very difficult for anyone to answer without knowing more about any tradelines (credit accounts) you have active, your credit utilization ratio, and how consistent you are in paying your tradelines on time. A person practicing good credit hygiene with several active tradelines will see a faster recovery than a person with one tradeline making occasional late payments.

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