Factors and Weights in Credit Score Calculation

For virtually any type of loan out there, credit score is an important factor to at least some degree. It’s often the determining factor between whether you can or can’t qualify for certain standard loan programs, and is also important for the kinds of lending thresholds you can qualify for within signature loans and other personal loan options.

At Utah Money Center, we offer several affordable cash loan solutions for those who require a brief financial boost for one of several reasons. Understanding your credit score and what goes into it can often help you secure the best possible terms for our loan types and many others – with this in mind, here are some basics on the factors that contribute to your credit score, how they’re weighted, and what your final number is telling you about your credit.

weights credit score calculation

Credit Score Weights

When using the FICO credit score, by far the most common type today, weights for credit score are relatively simple. While the precise formula used here is not public, FICO has published the primary factors that contribute to obtaining your final credit score:

  • Payment history (35 percent of your score’s weight): Simply put, how well have you repaid various lines of credit in the past? If you’ve missed payments or have several late payments on your record, this will ding your score, as will payments made under the minimum amount required.
  • Credit limit used (30 percent): Total up all your credit accounts and their combined credit limits – what percentage of this limit are you currently using? If possible, keeping this number at or below 30 percent will keep your credit score in good shape. If this number rises above 40 percent, on the other hand, it will ding your score.
  • Credit history (15 percent): In this case, history refers to the length of time your accounts have been in active use. The longer a history you can provide, the better it will reflect on your score.
  • Credit mix (10 percent): Are you using more than one credit account type?
  • New credit accounts (10 percent): While it’s good to have both older and newer credit accounts that show diversity, you should avoid opening too many new accounts – doing this will raise red flags and possibly lower your score.

Credit Score Ranges

So how do you tell if you have a good credit score? FICO scores range from 300 at the low end to 850 maximum, and this is a general range for how scores are evaluated by lenders:

  • 800+: Excellent
  • 740-799: Very good
  • 670-739: Average
  • 580-669: Fair
  • Under 580: Poor

If you’re wondering how credit score impacts your ability to get certain signature or title loans, or if you’re interested in any of our programs, speak to the staff at Utah Money Center today.