What is a Credit Score?

How is it determined?

Your FICO (credit) score evaluates five main categories of information given to the three credit bureaus along with their general level of importance.

1. Your payment history counts for approximately 35% of your score. Whether or not you have paid past credit on time is the first thing any lender would want to know and carries the most weight in your score. Your score takes into account many types of accounts.

· Credit Cards (Visa, MasterCard, Discover)

· Retail accounts (store credit cards)

· Installment loans (car loans)

· Finance company accounts

· Mortgage loans.

The score also takes into account public records. These might include bankruptcies, foreclosures, collections, wage attachments, liens, and judgments. Bankruptcies can stay on your credit report for 7 to 10 years depending on the type. Details on late or missed payments are also included. A 60-day late payment a month ago will affect a score more than a 90-day late payment five years ago. To increase your credit score, make all payments on time.

2. The amount of money owed on your accounts counts for approximately 30% of your score. It is important to remember that even though you pay off your credit card balances every month your credit report may show a balance based on your last month’s statement. A large number of accounts with balances can show a higher risk of over-extension. Being close to “maxing out” on several credit cards can show you may have trouble meeting obligations in the future. Paying down installment loans in a timely manner is a good sign you are responsible and willing and able to manage and repay debt.

3. The length of your credit history usually counts for approximately 15% of your score. A longer credit history with prompt payments will generally increase your score. However, if you have been managing credit for a short time, don’t open a lot of new accounts too rapidly for this could be risky.

4. Approximately 10% of score is based on your taking on more debt. FICO distinguishes between a search for a single loan and a search for many new lines of credit by the length of time over which inquiries for the new credit occurs. FICO scores only consider inquiries for the last 12 months.

5. The type of credit in use counts for approximately 10% of your FICO score. The score will look at your mix of credit cards, retail accounts, installment loans, finance company accounts, and mortgage loans. It is not necessary to have one of each and it is not a good idea to open credit accounts you don’t intend to use.

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Darin Darling at

14916 S Western

Oklahoma City, OK 73170

(405)799-2033 Office (405)799-5054 fax

darin@brennermortgage.com