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Five Factors that Make Up Your Credit Score

Posted by Megan Valenzuela Posted on Jan 05 2016


Curious about what makes up your credit score? Well there are five factors to consider and understand.  By understanding these then you will be better equipped to increase your credit score.

The higher the credit score you have then the more appealing you are to lenders.  If you’re looking at purchasing a new car, buying a home or opening a credit card then you’re going to want a good credit score.  There are five factors that go into your credit score and it’s important to understand so you can have a healthy credit score.  

One way to check your credit score is by going to  They have the three credit bureaus listed to look at your credit report.  From there you will pay a nominal fee to see your credit score.  

1) Payment history – making your payments on time and never missing a payment contributes to about 35% of your credit score.

2) Total amounts owed – how much balance you carry against the total credit limit, which is called the debt utilization ratio.  This contributes to about 30% of your credit score.

3) Length of history – how long that particular credit has been open.  So if you opened a credit card when you were 20 and still have that same card open at the age of 40 then you’d have 20 years of credit history with that one lender.  It’s seen as a good thing because you will appear as a loyal client and trustworthy borrower.  When you close an account you are basically ending that history with a longstanding borrower.

4) New credit – when you go to apply for a new loan then this appears as a credit inquiry and accounts for 10% of your credit score.  So by continually apply for loans or credit cards that could have a negative effect on your credit score.

5) Types of credit you currently have – student loans, mortgage, car loans, personal loans, store credit, etc. This equates to about 10% of your credit score.

Now that you know the five factors that go into your credit score, it’s important to know where you should keep your credit score.  Your credit score can range between 300-850.  Ideally, you want to be 760 or greater.