What information is included in calculating my credit score?

The most well-known credit scores are those produced by FICO® and VantageScore™. Credit scores are created by applying credit score models to credit record data from the credit bureaus.

Your general credit score is a number from 300 to 850, and the higher your credit score, the better your credit. Exactly how this number is calculated is not disclosed, but the relative importance of each contributing category for VantageScore is described below.

Understanding these six categories and their weights will help you determine the areas you should be focusing on in managing your credit scores over time.

Most Important

The single most important factor in determining your credit score is Payment History. This factors in all of your on-time payments, so it is extremely important to make your payments each month by or before their payment due dates! One of the worst things you can do for your credit score is to make late payments, default on payments, or file for bankruptcy. These three actions fall under this category of payment history and will have a significant negative effect on your credit score. One thing to note is that defaulting on a larger payment (such as a mortgage) will have a deeper effect on your credit score than defaulting on a smaller payment (such as a credit card).

Very Important

Two separate factors are very important: Age & Type of Credit History and Credit Line Utilization.

It is very helpful to your credit score to maintain a mix of accounts over time that demonstrate you are able to handle responsibly all types of credit. These include auto loans, retail store and gas cards, general purpose credit cards (Visa, Mastercard, American Express, Discover), mortgages, and – if applicable – student loans. The longer you have had open revolving lines of credit or credit cards, the greater the beneficial impact on your credit score. This component of your score is the reason why it can be hard to have a high credit score when you’re first starting to build credit. Your credit history is actually calculated by the average age of all of your current credit accounts. This means that closing your oldest account can cause your credit score to dip because the average age of your accounts will go down. However, simply having a long and good credit history can make your credit score higher. Knowing you have a long history of on-time payments makes you a more reliable candidate and your credit score will therefore be higher.

Credit line utilization factors in how much of your total credit you have actually borrowed; it is the percentage of available credit you have borrowed and which you will eventually pay back. Keeping this number low will make your credit score higher because lenders see people who need to borrow less money as more reliable and financially stable. If you are close to your credit limit on one or more credit cards, you are also more likely to miss a payment, meaning that your credit score will be lower. Try to keep total credit line utilization at 30% or lower.


The fourth credit score element is similar to Credit Line Utilization (CLU) but this item is Total Balances to Total Debt Percentage. CLU looks only at revolving lines of credit. This calculation of Total Balances to Total Debt includes in both the numerator and the denominator all term debt that you have. This would include term mortgage loans and installment loans (such as automobiles, student loans, and all other purchases financed over time that have a specific payment term).

Less Important

The fifth and sixth elements that make up your personal VantageScore scores are Recent Credit Inquiries and Total Available Credit.

Recent Credit Inquiries is simply the amount of new accounts you have opened or have formally applied for. The more accounts you open, the lower your credit score will be because lenders see people who have opened, or tried to open, many credit accounts in a short window of time as potentially unreliable since it could be the case that the person is in financial trouble now or soon will be. Although it may seem smart to open and manage many accounts, opening too many accounts too rapidly will have a negative effect on your credit score. Slow and steady accumulation of credit where you demonstrate your consistent ability to manage that credit responsibly is the key to building a strong credit score.

Total Available Credit is the last factor that regularly enters into your credit score calculation. This factor assesses whether, based on comparisons with multiple different anonymous peer groups and the performance of these groups over long periods of time, you have a prudent amount of total credit available. Large amounts of credit that you don’t need or use can be a risk for lenders.

One other Factor

The six elements described above assumes that there are no significant or recent negative public records filings in your credit records. Bankruptcies, liens, judgements and other such negative public records filings, will negatively impact your credit score and will reduce the benefit of any other elements for many years. Depending on the severity of this negative information, the negative impact to your overall credit score can be very significant.