Your credit score is a rating used by a lender to estimate the risk in offering you a credit card, loan, or service. This score is calculated by analyzing many types of information found in your credit report.

Fair Isaac divides portions of your credit history from the credit bureaus into five major categories as outlined in the chart above.

• Your payment history represents up to 35% of the credit score.
• Your total debt (amount owed on all accounts) represents around 30% of your credit score.
• The length of your credit history that can be verified represents up to 15% of your credit score.
• The amount of recent or new credit represents up to 10% of your credit score.
• The types of credit used represents up to 10% of your credit score.

While the exact formula used by FICO to calculate a score is a mystery, here are some general criteria that will help you improve your Fair Issac score:

Number of credit cards to have: 2 to 4 is best

How long ago you got your first loan: The longer the better

The number of loans or credit cards you applied for in the last year: The fewer the better

How recently you opened a new loan or credit card: The longer the better

Number of your loans and/or credit cards that currently have a balance: The fewer the better

Total balances on all other loans and credit cards combined: You need a reasonable but moderately small balance.

The amount of time since you last missed a loan or credit card payment: The longer the better

The most delinquent you have ever been on a loan or credit card payment: The less the better

Number of loans and/or credit cards are currently past due: The fewer the better, 0 is absolutely the best

Your credit card balances compared to your total credit card limits: The smaller the better

Negative financial events in the last 10 years such as: bankruptcy, tax liens, foreclosure, repossession, or accounts referred to collection agency: Any or all of these events would be very negative.

FICO CREDIT SCORES RANGE FROM 350-850 AND ARE RATED AS FOLLOWS:

Excellent
FICO 750 - 850

Good
FICO 660 - 749

Fair
FICO 620 - 659

Poor
FICO 300 - 619

The median FICO score in the U.S. is 723