The factors that go into calculating a FICO credit score, the system used by most banks and other businesses that deal in credit, include payment history, amount of debt, length of credit history, types of credit and amount of inquiries. Special circumstances such as bankruptcy or a limited credit history also impact credit scores.
Payment history counts as 35 percent of a FICO credit score. This includes whether or not bills are paid on time, how long bills remain delinquent before they are paid and the amount of current late payments. The amount of debt in relation to credit limits, or credit utilization, counts as 30 percent of the score. This factor rewards accounts with plenty of available credit.
The length of a consumer's credit history counts as 15 percent of a FICO score. This factor makes it beneficial to keep credit accounts open, but it penalizes young people and immigrants who are just starting to establish credit scores. The amount of different types of credit accounts a consumer has counts as 10 percent of the credit score. The ability to manage several forms of credit such as a mortgage, credit cards and retail accounts is considered an advantage. Finally, the amount of credit score inquiries a consumer makes counts as 10 percent of the credit score, because making too many credit inquiries is an indication of financial difficulties. However, inquiries to compare rates for auto, housing or student loans are not considered risk factors.