We get asked this question ALL the time. How is a credit score determined? Unfortunately the answer to that can’t 100% be answered. While Congress did make the credit bureaus release your credit reports free every year at http://www.annualcreditreport.com they forgot to include making Fair Isaac release exactly HOW they determine a credit score. However, there are some lovely leaks on the Internet, and this list will give you a fair idea of how a credit score is determined:
About 1/3 of the score is your current payment history. Usually this goes over a 2 year period. Both late and on time payments are figured into this number.
The next 1/3 is determined by amount of debt, and the ratio of debt, to credit available. The higher the debt level the lower the score. Even if you have a perfect payment history this can really drag you down.
The next 1/3 is determined by the types of credit you have (multiple types are better) the overall length of credit history, and how many recent credit apps you have.
This is just a basic list but gives you a good idea of what to be looking for when it comes to your credit score!
