How are credit scores calculated?

The main factors involved in calculating a credit score are:

  • The number of accounts you have
  • The types of accounts
  • Your used credit vs. your available credit
  • The length of your credit history
  • Your payment history


If you look at your credit scores based on data from each of the three national CRAs – Equifax, Experian, and TransUnion – you may see three different scores even if the same credit scoring model is used. This is completely normal. Your scores may not all be the same because not all creditors and lenders report to all three CRAs. Many creditors do report to all three, but you may have an account with a creditor that only reports to one or none at all.


There are many different scoring models and here is a general breakdown of the factors the models consider:

Payment history: 35%

Your credit history includes information about how you have repaid the credit you have already been extended on credit accounts such as credit cards, lines of credit, retail department store accounts, installment loans, auto loans, student loans, finance company accounts, home equity loans and mortgage loans for primary, secondary, vacation and investment properties.


In addition to reporting the number and type of credit accounts that you’ve paid on time, this category also includes details on late or missed payments, public record items and collection information. Credit scoring models look at how late your payments were, how much was owed, and how recently and how often you missed a payment. Your credit history will also detail how many of your credit accounts are delinquent in relation to all of your accounts on file. So, if you have 10 credit accounts (known as “tradelines” in the credit industry), and you’ve had a late payment in 5 of those accounts, that ratio may impact your credit score.


Your payment history also includes details on public record and collection items, including bankruptcies, foreclosures, wage attachments, liens, and any delinquencies that have been reported to collection agencies.


The scoring model will take all of this information into account, which is why the payment history section account may have the biggest impact in determining your credit score.


Used credit vs. available credit: 30%
A key part of your credit score analyzes how much of the total credit line is being used on your credit cards, as well as any other revolving lines of credit. A revolving line of credit is a type of loan that allows you to borrow, repay, and then reuse the credit line up to its available limit.

Also included in this factor is the total line of credit. This is the maximum credit limit you could charge against a particular credit account, say $2,500 on a credit card.

Credit scoring models take into account how much you currently owe compared to the original amount of the installment loan. How you manage monthly payments is important.


Type of credit used: 15%
Your credit score reflects the different types of credit accounts, or “trade lines,” you have, including revolving debt (such as credit cards) and installment loans (such as mortgages, home equity loans, auto loans, student loans and personal loans).

The other key factor is how many of each type of tradeline you have. Creditors like to see that you’re able to manage multiple tradelines of different types and the credit score algorithm reflects this.


New credit: 10-12%
Your credit score also reflects how many new credit accounts you have opened compared with the total number of “tradelines” in your credit file. Credit score models take into account how many recent requests for credit you have initiated, as indicated by inquiries by creditors to credit reporting companies. (These inquiries are known in industry jargon as “hard pulls,” of your credit.)

Your credit score does not take into account requests a creditor has made for your credit file or credit score in order to make a preapproved credit offer, or to review your account with them, nor does it take into account your own request for a copy of your credit history (known as “soft pulls” of your credit).

Your credit score will factor in the length of time since creditors made credit file inquiries.


Length of credit history: 5-7%
This section of your credit history details how long your credit accounts have been established. The credit score calculation includes both how long your oldest and most recent accounts have been open. In general, creditors like to see that you’ve been able to properly handle credit accounts over a period of time.

Credit score models look at how long different types of accounts have been established, how recently each credit account has been used, and whether there has been a public record item listed on your credit history.

Any business or person who receives a copy of your Equifax credit report will be listed under the “Inquiries” section of your Equifax credit report. If you learn that your Equifax credit report has been obtained outside of the reasons outlined in FCRA, please contact:

Equifax Information Services LLC
P.O. Box 105069
Atlanta, GA 30348