How is Fico Score Calculated

Simulated FICO Score Impact Calculator

Use this calculator to understand how different aspects of your credit profile *might* influence a FICO score, based on the general weighting of its five main categories. This is a simulation, not an actual FICO score calculation.

(e.g., 100 for perfect, 50 for frequent late payments)

(e.g., 90 for very low utilization <10%, 30 for high utilization >50%)

(e.g., 85 for long history >10 years, 40 for short history <3 years)

(e.g., 95 for no recent inquiries, 50 for multiple recent inquiries)

(e.g., 90 for diverse accounts, 50 for only one type of account)

Simulated FICO Impact Score

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This is a simplified simulation to illustrate the impact of different factors, not an actual FICO score.

Understanding How Your FICO Score is Calculated

Your FICO score is a three-digit number that lenders use to assess your creditworthiness. Ranging from 300 to 850, a higher score indicates lower risk to lenders, potentially leading to better interest rates and easier approval for loans, credit cards, and even rental applications. While the exact proprietary formula is complex, FICO publicly discloses the five main categories that influence your score and their approximate weightings.

The Five Key FICO Score Categories:

1. Payment History (Approximately 35%)

This is the most crucial factor. Lenders want to see a consistent track record of on-time payments. Late payments, bankruptcies, foreclosures, and collections accounts can significantly harm this portion of your score.

• What helps: Paying all your bills on time, every time.
• What hurts: Missing payments, especially by 30 days or more; having accounts sent to collections.
• Example: A "Payment History Health" of 95% might reflect a few minor late payments over many years, while 60% could indicate several recent 30-day late payments.

2. Amounts Owed (Approximately 30%)

This category looks at how much debt you have relative to your available credit. It's often referred to as "credit utilization." Keeping your credit utilization low (ideally below 30% of your total available credit) is key.

• What helps: Keeping credit card balances low, paying down loans, and not maxing out credit lines.
• What hurts: High credit card balances, especially near your credit limit; having many accounts with balances.
• Example: A "Credit Utilization Health" of 90% suggests you're using less than 10% of your available credit, whereas 40% might mean you're utilizing 60-70% of your credit.

3. Length of Credit History (Approximately 15%)

Generally, the longer your credit history, the better. This factor considers the age of your oldest account, the age of your newest account, and the average age of all your accounts. A longer history provides more data for lenders to assess your reliability.

• What helps: Keeping old accounts open (even if unused), establishing credit early.
• What hurts: Closing old accounts, having a very short credit history.
• Example: A "Credit Age Health" of 80% could represent an average account age of 10+ years, while 35% might be for someone with an average age of only 2-3 years.

4. New Credit (Approximately 10%)

This category looks at how often you apply for new credit. Opening too many new accounts in a short period can be seen as risky, as it might indicate financial distress or an inability to manage existing debt. Each "hard inquiry" (when a lender pulls your credit report after an application) can slightly lower your score for a short period.

• What helps: Applying for new credit only when necessary, spacing out applications.
• What hurts: Numerous hard inquiries in a short timeframe, opening many new accounts quickly.
• Example: A "New Credit Inquiries Health" of 95% means you've had no recent hard inquiries, while 55% could indicate 3-4 hard inquiries in the last 6-12 months.

5. Credit Mix (Approximately 10%)

Lenders like to see a healthy mix of different types of credit accounts. This includes revolving credit (like credit cards) and installment loans (like mortgages, auto loans, or student loans). Demonstrating that you can responsibly manage various types of credit can positively impact your score.

• What helps: Having a diverse portfolio of credit accounts (e.g., a credit card and an auto loan).
• What hurts: Only having one type of credit account, or a very limited credit profile.
• Example: A "Credit Mix Health" of 85% might mean you have a credit card, a student loan, and an auto loan, whereas 50% could be someone with only one credit card.

Improving Your FICO Score

Understanding these categories is the first step to improving your FICO score. Focus on:

1. Paying on time: Set up reminders or automatic payments.
2. Keeping balances low: Pay down credit card debt and avoid maxing out cards.
3. Maintaining old accounts: Don't close old credit cards, even if you don't use them.
4. Being mindful of new credit: Only apply for credit when you truly need it.
5. Diversifying responsibly: Over time, aim for a mix of credit types, but don't take on debt you don't need just for the mix.

Remember, building a strong credit score takes time and consistent responsible financial behavior. The calculator above provides a simplified way to see how changes in these areas *could* affect your overall credit health.