How is My Credit Score on Fico Calculated – Quick and Simple Step

If you are asking the question How is My Credit Score Calculated, then you probably must be interested in applying for a credit card. The credit score usually is referred to as the FICO score and it is a proprietary tool that was created by FICO, the data analytics company that was recognized as the Fair Isaac Corporation.

How is My Credit Score on Fico Calculated

How is a FICO Credit Score Calculated?

FICO at the moment is not the only available type of credit score, but it is one of the most common measurement lenders that is being used to know the risk involved in doing business with someone that wants to borrow. In this article, we will place our Focus on what FICO examines to come up with their Credit Scores.

Percentage Credit Score

To dive deep into details on the calculation, what exactly does a credit score measure? FICO does not exactly reveal any of its proprietary credit score calculator formulas, but it is recognized for the five major components that I will be stating below. They all vary in level of importance.

  • Payment history (35%)
  • New credit (10%)
  • Credit mix (10%)
  • Amount owed (30%)
  • Length of credit history (15%)

All these categories would get taken into account to get your overall score, which is expected to range from about 300 to 850. It is not just determined by one factor or incident entirely.

How Each Category Contributes

Payment History

The payment history category determines if you have paid your credit account consistently and early. This also factors in your previous bankruptcies, collections, and delinquencies. It takes into consideration the size of this issue, the time it took to get the resolved, and how long it has been since the issue popped up. The more payment issues that you face in your credit history, the lower your credit score will be.

Amount Owed

The most used component is the amount that you own currently relative to the credit that you have available. Credit score formulas usually come to the conclusion that borrowers who continually spend up to or above the credit limit are a potential risk.

Length of Credit History

If your credit has been open for much longer and it is in good standing, then you have a better chance at a great credit score. Let’s put it this way, someone who has always made payments on time for 15 years has a better standing than someone who has only done it for two years.

New Credit

Also, When people choose to apply more frequently for credit, this indicates financial pressures, so every time you apply for credit, your score gets dinged a bit. Before opening a new credit account, it’s smart that you consider whether having that extra credit is worth the drop in your credit score.

Credit Mix

Lenders always like to see a healthy Credit mix that would show you just how successfully you can manage different types of credit. Revolving credit which includes Credit cards, retail store cards, gas station cards, lines of credit, and installment credits like Mortgages, Auto Loans, and Student loans should be presented if you can.


It is very important that you have a clear understanding of how your credit score would reflect only the information that is entailed in your credit report. Your Lender actually might consider other details in its appraisal. Your credit report would not entail the following:

  • your age
  • current income
  • or length of employment

Your Credit score is one major tool that can be used by lending agencies. It is very important that you monitor your credit score.

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