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How is Your FICO Score Calculated?

Posted by GO Mortgage Team on 1/25/19 9:34 AM
GO Mortgage Team

Credit bureaus use a statistical formula to review your credit information and compare it to credit performance of consumers with similar profiles. A credit scoring system awards points to specific factors. The total of your points determines your credit score and gives your lender a prediction of how you may repay your loan. 


When looking to purchase your first home, your credit score is a large influence in securing that loan. By understanding how your score is determined, it can help you take the right action to improve your score.

Below are the factors that determine your credit score and the weighted impact they have on your score.   

  1. Do you pay your bills on time? 35% IMPACTCreditPieChart
    If you have paid late, had an account sent to a collection agency or have declared bankruptcy, this will have a negative impact on your credit score. 
  2. What is your outstanding debt? 30% IMPACT 
    Many scoring models compare the amount of debt you have with your credit limits. If the amount you owe is close to your limit, it is likely to have a negative impact. 
  3. How long is your credit history? 15% IMPACT
    A short history can have a negative impact but can be offset by on-time payments and low balances. 
  4. How many and what types of credit accounts do you have? 10% IMPACT 
    Many scoring models consider the number and type of accounts you have. A mix of installment loans and credit cards may improve your score. Too many finance company accounts or too many credit cards will likely hurt your score. 
  5. Have you applied for new credit recently? 10% IMPACT  
    Applying for too many accounts within a short time period can negatively affect your score. 

It’s important to know the different factors and various weights used to determine your credit score.  By focusing your efforts on the right factors, you can help improve your score.


Speak with a GO Mortgage Home Loan Advisor to learn more about improving your credit.

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Topics: FICO score, credit monitoring, credit report, credit score

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