How do credit bureaus calculate a credit score?

How do the credit bureaus calculate credit scores?

While we can't know for sure how the credit bureaus calculate your score, we know credit scoring is affected by your payment history, revolving credit utilization (comparison of your balance to credit limit), length of credit history, amount of new credit accounts/balances, and having a credit mix (meaning a wide range of the types of accounts reporting).

• 35% payment history
• 30% amounts owed
• 15% length of credit history
• 10% new credit
• 10% credit mix

The payment history includes if you've had any late payments over the previous 10 years on accounts. Amounts owed includes revolving accounts where a high balance can negatively impact your credit score. This also includes amounts owed on installment loans. The length of your credit history affects your credit score. If your open accounts are new, this could impact your score negatively. The credit mix is the type of accounts you have open. You want to have a mixture of revolving and installment loans as well as an auto loan and a personal loan and mortgage loans.

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