Credit Scoring Factors

Different types of information, known as factors, are gathered from your credit report to make up your credit score. These factors fall into broad categories, such as payment history and outstanding debt.

Credit scores reflect credit patterns over time.

Credit scoring models rate the importance of each category to calculate your credit score.

Credit scores reflect credit patterns over time. An adverse action, like a tax lien or bankruptcy filing, can immediately and significantly impact a credit score.

Several factors can have a negative impact on your credit score:

History of nonpayment
Public record information
Evidence of collection accounts
Recent delinquent accounts
High balances owed on accounts
Credit cards charged to their limits
Too many new accounts

Only the applicant's prior credit history is considered when calculating a credit score. For this reason, credit scoring is considered unbiased. Any factors that would show bias are not allowed.

Your credit score cannot be based on any of these factors:

Income level
National origin
Sources of income
Marital status

Because income level is not a factor, you could have a low income and a high credit score. Or you could have a high income and a low credit score. It just depends on your credit history.

FICO® scores, developed by Fair, Isaac and Co., Inc., are the most commonly used credit scores today. According to FICO, the various factors used to calculate credit scores can be grouped into five primary areas:

1. Payment history
2. Outstanding debt
3. How long you have been using credit
4. Pursuit of new credit
5. Types of credit in use

Fair Isaac is one credit scoring company. Other companies may use different factors.

Understanding credit scoring


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