Calculating Your Fico Score

By Author: Elliot Spalding
Total Articles: 14
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Do you want to know what you can do to improve your FICO score, if so you need to know the FICO score calculation. This is complex formula that is not completely disclosed to the public. What is know about the FICO score calculation are the general areas of the formula and the factors that go into each.

The first and largest part of the FICO score calculation is your payment history. This looks at how well you pay your bills on time. The factors used when analyzing your payment history is any late payments you might have. They are looked at for how often you are making late payments, how late were you when you made a payment, and how recent was your last late payment.

The next part of the FICO score calculation is how much you owe. This takes how much your credit balances and divides it by your credit limits. This is done for you as a whole and on an account by account basis. Also, this is commonly referred to as your utilization. The rule to follow is the lower the better with a goal to be somewhere around 10% to 15%.

The third part of the FICO score calculation is your credit history. This ...
... looks at two different things. First is the age of your oldest account and second, the average age of all your accounts. The longer the history the better it is for your FICO score calculation.

The next part of the FICO score calculation is applications for credit. These are usually referred to as credit inquiries. This looks at how many times you have applied for credit in the last two years.

The last part of FICO score calculation is your credit mix. This is looks at what types of credit you are using. There are no hard fast rules to what the right mix is. The basics are only known. So you should not just use credit cards but vary the types of credit you use. This will be better for your score.

The FICO score calculation is a very complex formula and it has all these factors interacting with each other. This makes any action you do could have an effect on several parts of your score. The FICO score formula also puts an emphasis on recent activities. So having a better understanding of how the formula works will help you make decisions to improve your credit standing.
To read more about the FICO score calculation, visit Elliot's website. There you will find more great information about how to get a free credit score online