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Ingredients of the Credit Score

Your credit score does a lot more than help you get a better interest rate – in today’s credit world it is becoming increasingly more important to be keep a good credit rating for basic things like employment, renting, and even insurance!

The main ingredients to the credit score include the Payment History, Amounts Owed, the Length of Credit History, New Credit and the Types of Credit Used.

This pie chart shows the percentage of each category that is attributed to the overall credit score.

The Payment History is the most significant part of the credit score and accounts for 35% of the total score. The Payment History consists of:

  1. Payment information on accounts like credit cards, store cards, installment loans, finance company accounts, mortgage loans, etc.
  2. Any adverse public records (like bankruptcy, judgments, suits, liens, wage attachments, etc.), collection accounts, and past due items.
  3. The length of time account is past due.
  4. Amount past due on delinquent or collection accounts.
  5. Length of time since past due items, adverse public records or collection items occurred.
  6. Number of past due items on file.
  7. Number of accounts paid as agreed.

The Amounts Owed accounts for 30% of the overall credit score. The Amounts Owed is determined by:

  1. Amount owed on accounts.
  2. Amount owed on specific types of accounts like credit cards, store cards, installment loans, finance company accounts, mortgage loans, etc.
  3. In some cases, lack of a specific type of balance (for example; there may only be balances on credit cards and no balance on an installation account).
  4. Number of accounts with balances.
  5. Amount of credit lines used (the balances compared to total credit limits on revolving accounts).
  6. Amount of installment loan still owed (the balance compared to original loan amount).

Length of Credit History is 15% of your credit score and is determined by;

  1. Time since accounts were opened.
  2. Time since accounts were opened by the type of account.
  3. Time since last account activity.

New Credit is 10% of the overall score and includes factors like;

  1. The number of recently opened accounts.
  2. The proportion of accounts that are recently opened, by the type of account.
  3. Number of recent credit inquiries.
  4. Time since recent account opening.
  5. Time since credit inquiry(s).
  6. Establishment of positive credit history following past credit problems.

Types of Credit Used makes up another 10% of the overall credit score and considers;

  1. The existence of various types of accounts like credit cards, retail accounts, installment loans, mortgage loans, etc.

The importance of any one factor depends on the information in your credit report. Also, the credit score includes all the factors – it does not pick and choose the good from the bad.

You are entitled to a free credit report from each of the credit reporting agencies once a year. To get a free copy of your credit report, go to and click on Resource Center.

Published May 1, 2008.