How to Calculate a FICO Credit Score

The FICO credit scoring system, created by Fair Isaac Company, is the most common method used to determine the creditworthiness of a consumer. FICO provides a number between 850 and 300, which correlates with several factors of your credit history. A credit score of 720 or higher demonstrates that you are a good credit risk, while scores below 660 mean your credit might need some work. FICO score information is provided to creditors on your credit report, which can be obtained from one of three credit bureaus (Experian, Equifax or Trans Union).

Instructions

1

Keep careful track of your payment history. This accounts for 35 percent of your FICO score. Your payment history should include the type of accounts you have (mortgage, credit card, or car loans), any adverse judgments such as bankruptcy and liens, payment delinquency as well as length of delinquency and amount due and the time that has elapsed since negative information was placed on your credit record.

2

Determine the amount owed on each outstanding account. Keep this information in a bank ledger and update each month as debts are paid. One third of your FICO score is based on this figure.

3

Establish an excellent, long standing credit history. The length of time you have excellent (or poor) credit comprises 15 percent of your credit score. If you do not have a credit history, apply for a credit card and make regular payments to demonstrate that you are an excellent credit risk.

4

Assess the number of new accounts taken out. Ten percent of your FICO score is based on this figure. If you already have good credit established and are considering applying for a large loan, such as a mortgage. new credit inquiries could be detrimental to your credit score.

5

Make note of the type of credit you have established. This accounts for the final ten percent of your FICO score. Having reputable credit sources, such as bank credit cards and mortgages, as well as an excellent payment history will be beneficial in obtaining a higher credit score.