What Affects Your FICO Credit Score and What You Can Do About It

Your FICO credit score is a measure of your credit rating - calculated from data contained in your credit report. Most lenders base their credit decisions (at least in part) on this score. Generally, the higher your score, the more likely a lender is to approve your loan and the more likely you may qualify for a lower interest rate.

There are five categories of credit data that influence your score in varying degrees:

1. Payment history - how timely you've been in paying on your accounts.

2. Amounts owed - the outstanding balances on your account and the percentage of each credit line you've used.

3. Length of credit history - how long your accounts have been open.

4. New credit - the number of recently opened accounts.

5. Types of credit used - the different types of credit relationships you have.
Most FICO credit scores range between 350 and 850, with higher scores representing better credit risk. The higher your score, the more likely you are to get a lower interest rate on a mortgage or car loan. Your FICO score changes over time with all of your credit activity, and your actions can change your score.