Each component of your credit report is assigned a percentage based on its importance. It breaks down as follows:

Payment History (35%)

  • Account payment information on specific types of accounts (credit cards, retail accounts, installment loans, finance company accounts, mortgage, etc.)
  • Presence of adverse public records (bankruptcy, judgments, suits, liens, wage garnishments, etc.), collection items, and/or delinquency (past due items)
  • Severity of delinquency
  • Amount past due on delinquent accounts or collection items
  • Time since delinquent items were paid
  • Number of delinquent items
  • Number of accounts paid as agreed

How to Improve this Part of Your Score

  • Pay your bills on time
  • If you have missed payments, get current and stay current
  • Be aware that paying off a collection or closing an account on which you previously missed a payment will not improve your credit report.
  • If you are having trouble making ends meet, contact your creditors or seek legitimate credit counseling.

Amounts Owed (30%)

  • The amount you owe on all accounts
  • The amount you owe on specific types of accounts
  • Number of accounts in which you are carrying balances
  • How much of your total credit line is being used on credit cards and other “revolving credit” accounts?
  • How much do you still owe on installment loan accounts compared to the original loan?

How to Improve this Part of Your Score

  • Keep your balances on credit cards and other “revolving” accounts low.
  • Pay off your debt rather than moving it around.
  • Don’t close unused credit cards as a strategy for improving your score because it erases important credit history!
  • Remember, the only person who can improve your credit score is you! Avoid companies who claim they can improve your score for a fee.

Length of Credit History (15%)

  • How long have you had credit accounts, in general?
  • How long have you had specific credit accounts?
  • How long has it been since you have used certain accounts?

How to Improve this Part of Your Score

  • Even if you are carrying $0 balances on your credit cards, do not close the accounts. Doing so erases a vital piece of your credit history and can actually lower your credit score.
  • Put credit cards in a safe place where you cannot access them easily.
  • If you have a short credit history, do not open a lot of new accounts too rapidly. This will appear as though you are looking to take on new debt and lower your credit score.

New Credit (10%)

  • How many new accounts do you have?
  • How long has it been since you opened a new account?
  • How many recent requests for credit have you made?
  • What is the length of time between credit inquiries by lenders?
  • Have you been able to re-establish a good payment history following a past payment problem?

How to Improve this Part of Your Score

  • If you are shopping for an auto or home loan, do all of your rate shopping within 30 days.
  • Be careful about opening new accounts you don’t need.
  • Re-establish your credit history if you have had problems in the past.
  • Note that your score is not affected when you request or check your own credit report