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How Your Credit Score Is Figured

When it comes time to make a major purchase of any kind whether it's buying a car or a house, one of the first things we think about is our credit score.  You can't watch tv or surf the web these days without seeing an ad for checking your credit score, right? 

We all know what our number is but...do we know how that number gets figured?  


I didn't know either so I asked my friend Brian Borders at Tri-Stone Financial.  He said he gets asked this question ALL the time and here is how he breaks it down.  Your FICO score is figured this way: 

  • Payment History is 35% - prompt is best
  • Amount owed counts for 30% - less is best
  • Length of credit history is 15% - the longer the better
  • Credit mix is 10% - various types of credit is better than having just one type or credit
  • New credit lines count for 10% - new applications lower your score 

    When it comes to buying a home, your credit score is only one factor that is considered, all be it a big part of the equation. So hopefully this helps you to understand how the number you see when you check your score is determined.