How Your FICO Score is Calculated—and Why It Matters
Ever wondered what’s really behind that three-digit number that lenders obsess over? Your FICO® Score is one of the most important indicators of your financial health—and it’s built entirely from the data in your credit report.
Rather than being a random number, your FICO Score is calculated based on five weighted categories that measure how responsibly you’ve handled credit.
Each of these plays a different role in shaping your score. But here’s the twist: the impact of each category can vary from person to person depending on your unique credit behavior.
How FICO Scores Actually Work
Your FICO Score isn’t static—it evolves. As your credit habits and accounts change, so does your score. It takes into account both positive and negative data from your credit report to determine your reliability as a borrower.
And while the pie chart percentages listed above reflect general guidelines, they aren’t set in stone for everyone. For instance, someone with a short credit history may have their score weigh more heavily on recent credit activity, while someone with long-standing credit accounts may see more influence from utilization and payment history.
Your FICO Score is Personalized to You
No two credit reports are the same—so no two FICO Scores are calculated identically. Depending on your financial history and how recently you’ve used credit, FICO adjusts how it interprets each factor.
As your credit behavior evolves, so will your score. That’s why it’s difficult to pin down the exact impact of any one action—like opening a new credit card—without analyzing your full credit profile.
Your FICO Score Looks Only at Credit Report Data
Your FICO Score pulls only from your credit report. It doesn’t consider income, job status, or savings—though lenders might weigh those separately when making approval decisions.
What FICO Ignores:
- Salary and income level
- Length of employment
- Age, gender, or marital status
- Debit card activity
- Bank account balances
These elements might influence a loan decision—but they don’t touch your FICO Score.
Breakdown of FICO Score Factors: The Big Five
Here’s how FICO calculates your score using data from your credit history:
| Credit Factor | Weight in FICO Score |
| Payment History | 35% |
| Amounts Owed | 30% |
| Length of Credit History | 15% |
| New Credit | 10% |
| Credit Mix | 10% |
Each factor contributes a percentage to your total score—but the actual impact can vary based on your unique credit profile.
1. Payment History (35%)
This is the most influential factor. Lenders want to know if you’ve paid past credit accounts on time. Late payments, defaults, or bankruptcies can seriously lower your score.
💡 Pro Tip: Always make at least the minimum payment on time to keep this part of your score strong.
2. Amounts Owed (30%)
This looks at your credit utilization—the percentage of available credit you’re using. Owing money isn’t bad, but using too much of your credit limit signals higher risk.
💡 Pro Tip: Try to keep your credit utilization below 30% for optimal results.
3. Length of Credit History (15%)
The longer your credit accounts have been active, the better. FICO considers:
- Age of your oldest and newest accounts
- Average age of all accounts
- How recently each account was used
💡 Pro Tip: Don’t close your oldest accounts unless necessary—they add length and stability to your history.
4. New Credit (10%)
Opening multiple new accounts in a short time can hurt your score, especially if you’re new to credit. Each new inquiry can temporarily reduce your score.
💡 Pro Tip: Space out credit applications and avoid unnecessary hard inquiries.
5. Credit Mix (10%)
FICO likes to see a variety of credit types, like:
- Credit cards
- Auto loans
- Mortgages
- Retail store accounts
- Installment loans
💡 Pro Tip: You don’t need every type of account, but a healthy mix can help.
Why FICO Scores Can Vary
FICO Scores are tailored to your credit report, so the same factors may carry different weight for different individuals. For example, if you’re new to credit, your score may rely more on the few accounts you’ve opened recently. Over time, as your report evolves, so does the calculation.
💡 Your FICO Score is dynamic—it updates as your credit behavior changes.
What FICO Scores Don’t Consider
While your FICO Score is based solely on your credit report, it doesn’t include:
- Income
- Employment history
- Age or marital status
- Debit card use
- Assets or savings
However, lenders may still consider these when evaluating a loan application.
Need Help with Credit or Finances?
Struggling with debt or looking to build your credit? Financial counseling can offer personalized help with:
- Budgeting strategies
- Credit report reviews
- Credit-building plans
- Debt management
Take control of your credit today—knowledge is your most powerful financial tool.
Key Takeaway
Understanding what affects your FICO Score gives you the power to improve it. Focus on consistent, smart credit behavior, and over time, you’ll build a strong credit foundation for a healthier financial future.
