1. Making On Time Payments has a High Impact on your Score

For lenders, how you’ve handled credit is the most important factor impacting your Score. If you have a history of making on-time payments, then it’s likely you’ll continue to make on-time payments in the future.

Payment history accounts for 35 percent of a borrower’s FICO score.

In simple terms, if you have always paid on time, you’ll be rated Excellent on this Score Component. If you’ve been late on more than 10% of your payments you’ll be rated Below Average on this Score Component.

  • BELOW AVG : <90%
  • AVERAGE : 90% – 97%
  • GOOD : 98% – 99%
  • EXCELLENT : 100%

2. Age Of Your Oldest Account has a Moderate Impact on Score

The age of your oldest account will indicate to lenders how much experience you have handling credit. How you handle that credit will have a much higher impact on your score. Many young adults have excellent Credit Scores.

Credit history length accounts for 15 percent of a borrower’s FICO score.

How you handle that credit will have a much higher impact on your score. Many young adults have excellent Credit Scores.

  • BELOW AVG : 0 – 2 Yrs
  • AVERAGE : 3 – 7 Yrs
  • GOOD : 8 – 24 Yrs
  • EXCELLENT : 25+ Yrs

3. The Amount of Credit Used has a Very High Impact on Score

Having plenty of available credit relative to the amount you owe tells lenders that you manage credit responsibly.

The amount owed – accounts for 30 percent of a FICO score

  • BELOW AVG: 61% – 100%
  • AVERAGE: 31% – 60%
  • GOOD: 11% – 30%
  • EXCELLENT: 0% – 10%

Why is this important?
If you use too much of your available credit, you may not have enough credit when you need it. To lenders, this could be a sign that you may be overextended.

4. Inquiries in the Past 2 Years - Low Impact on Score

Lenders tend to see too many recent inquires as a sign of risk, so the fewer the better.

  • BELOW AVG : 6+
  • AVERAGE : 3 – 5
  • GOOD : 1 – 2
  • EXCELLENT : 0

5. New Accounts in the Past 2 Years - Low Impact on Score

For lenders, if they see someone opening too many new accounts in a short time, that could indicate a sign of credit problems.

  • BELOW AVG : 7+
  • AVERAGE : 5 – 6
  • GOOD : 3 – 4
  • EXCELLENT : 0 – 2

6. Total Available Credit - Low Impact on Score

If lenders see plenty of available credit relative to the amount owed, this indicates that you are managing your credit responsibly.

  • BELOW AVG: $0 – 2.5K
  • AVERAGE : $2.5K – 15K
  • GOOD : $15K – 50K
  • EXCELLENT : $50K+