How is my credit score determined?

Street Address 4750 S. Biltmore Lane, Madison, WI
City Madison
State Wisconsin
Country United States

There are five main factors that determine your credit score, each one weighing differently. The five main factors are:

Payment History – 35%

  • Paying debt on time and in full has a positive impact.
  • Late payment, judgments and charge-offs have a negative impact.

Outstanding Credit Balances – 30%

  • Keep balances below 50% of limit – below 30% is even wiser. Do NOT close accounts.
  • Pay outstanding debt down as close to zero as possible.
  • Evenly redistribute the remaining balance among open lines.

Length of Credit History – 15%

  • The length of time a particular credit line has been opened is important. A seasoned borrower is stronger.

Types of Credit (Healthy Mix) – 10%

  • A mix of auto loans, credit cards and mortgages is positive- rather than a concentration in credit cards only.

New Inquiries – 10%

  • Don’t “over-apply” for credit.
  • Auto and mortgage inquiries receive special treatment, and 20 inquiries can be made in a 14-day period and will be treated as only one inquiry.
  • Each hard inquiry can cost 2-50 points on a credit score.

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