A FICO Score is calculated from information present within your credit
report. It places value on the types of credit accounts you have and your
credit history of maintaining
those accounts. Averagely, people in USA have a FICO Score ranging from 600-850.


Its total range is from 300- 850.



For FICO score the information in credit report can be divided in 5 categories as shown below.
Each of the categories has their own importance in evaluating the score.

• 35% is for payment history
• 30% is for the ratio of current debt to the total available credit.
• 15% is for length of credit history
• 10% is for the type of credit you have used
• 10% is for the credit you have obtained recently

The above percentages are approximates. FICO scores are not influenced by
your current salary or your employment history.

Description of each factor

Payment history

Your payment history accounts for the most significant part in calculating your credit score. Payment history includes:

• Payment info of credit card accounts, retail accounts, loans, mortgage,
  etc.

• It contains objectionable public records such as bankruptcy, law suits,
  liens, etc. and the accounts that are delinquent.

• It contains information of the duration of these delinquent items due.
• It contains information on amount that was to be paid on these delinquent
  accounts.

• It contains time since the delinquent items, any poor public records, or any collection items
• It contains the number of delinquent items that are listed
• It contains the amount of accounts that you have paid off completely foloowing
  the agreement

Money owned

30% of FICO score is calculated by the total amount owned on accounts. Your total amount of credit is calculated and then compared
with your annual income. It also includes the following:

• FICO score includes all the accounts which have balances
• FICO score includes how much of the credit lines are used
• Not only the amount you owe is considered but also how much credit is available
  to you. If you have a credit line of $10000 and you have used only $2000 then
  that will also be taken into account. Those who have used all or most of their
  credit get a lesser rating.

• FICO score includes the amount of the installment loans owed.

Length of credit history

15% of the FICO score is made up of this factor. The longer is your credit
history; the better will be your FICO score. If you have a long history
with a particular creditor then that is even better for a FICO Score. It also
includes;

• Time since credit accounts were opened.

• Times since the an account
  was opened.

New Credit

The last factor which has a worth of 10% in the FICO score is the number of
accounts that you have opened in recent time, the percentage of such accounts
listed by each accounts type. Lots of applications filled above a certain number
of credit accounts have a negative impact on FICO score.



Lenders also make use of other methods of calculating your FICO score. These methods make use of the factors such as income, length of time at current residence, employment etc. Any of the above factors is not included in a FICO score.



New credit also includes the following;

• Total credit inquires recently made(such credit checks weigh down your credit
  score).

• The time when recent account were opened
• The time since a credit inquiry was made.
• It includes making your credit history better again after correcting the
  past credit troubles.

Credit type used

The fifth factor makes up 10% of your fico score. It includes the account types,
for example, do you have unsecured credit like credit cards, secured loans like
mortgage, installment accounts or consumer accounts. People who have a credit
mix have a higher FICO score.