How do you calculate your credit score?


Quick Answer

Credit scores are calculated differently based on the credit bureau. To calculate an estimate range a formula or online calculator may be used, as reported by Wells Fargo.

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Full Answer

To use an online calculator, go to a site like Calc XML that specializes in financial calculating. The credit score will be an estimate as different bureaus calculate the score differently. Personal information will be needed to fill out the calculator, so gather information about credit cards, loans and payment history before getting started. After filling out the form, a range will be given.

To see the breakdown of how the credit score is calculated, visit the credit monitoring site myFico. The score is a conglomerate of credit data that has been collected over the years. A mix of both positive and negative information is included in the makeup of the score.

There are five different categories that make up percentages of the credit score. Thirty percent of the score is calculated by amounts owed. This means how much is owed on various loans and credit cards, how many accounts are opened and the ratio of owed versus credit available. Thirty-five percent is made up of the history of payments. This includes if payments are made on time, missed payments, late payments and if payments have been missed recently. Paying bills on time helps the score while late or missed payments hinder it.

Fifteen percent is how long the credit history has been intact, the longer the history of making payments on time, the better the score will be, according to Wells Fargo. Ten percent will be the types of credit used. Keeping a variety of different accounts in good standing will positively impact the score report. The final 10 percent is made up of new credit. If there is a lot of recent activity with opening multiple accounts, it may negatively impact the score because the bureau might think there is potential financial trouble.

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