Your Credit Score is your financial report card

The actual formula may vary depending on which of the three credit reporting bureaus (Equifax, TransUnion, or Experian) is creating your score. A common formula weights the factors as follows:

Payment history — The largest factor in your credit score, counting for 35% of your total credit score. But, it is only one factor. Timely payments raise your score. Missed or late payments lower your score. About 30 different factors are used to determine your score.

Amounts owed — This factor counts for 30% of your score. In addition to total debt, the score considers the amount of credit card debt in relation to your credit card limits. Keeping debt levels well under your credit limits improves your score.

Length of credit history — This factor counts for 15% of your score. A long history of timely payments contributes to a higher score.

New Credit — This factor counts for 10% of your score. Too much recent credit activity can lower your score. This includes excessive "inquiries" from lenders, which may indicate that you are applying for lots of loans or credit cards.

Types of credit used — This factor counts for 10% of your score. A broad range of account types, such as credit cards, mortgages, retail accounts, and car loans improves your score. However, too many accounts can lower it.

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