Disclaimer: Below is a brief outline for educational purposes and each individual’s credit scores are determined and affected by various factors.

Each credit report indicates the major factors for the scores determined. Each credit score is determined by about 30 factors. Certain factors, such as payment history, have more weight than others, such as the length of credit history.

Factors can be categorized in five major areas:

  • Payment history - Payment status information, credit limit and balances on credit cards, installment loans (such as a car loan), mortgage loans or finance company accounts. A good score is given when no late payment is reflected on the report.
  • Outstanding debt - Amount owed on all accounts and on different types of accounts, such as credit cards or installment loans compared to the allowed credit limits. A good score is given with only 30% of credit limit is used.
  • Credit history - The length of credit history, number of accounts open and used. The longer the credit history with good payment history, the higher the score.
  • Pursuit of new credit - the number and timing of inquiries on existing and new accounts. The inquiries represent potential increase of credit usage, which reduce scores.
  • Types of credit use - Number of major credit cards, bank, travel, entertainment, department and store cards and installment loans. The more department and store credit cards, the lower the scores.