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Credit scores tell people about your past borrowing behavior. It’s a tool designed to help potential creditors, employers, landlords and others assess how likely you are to meet your financial obligations. Based on your credit history, it’s made up of the following factors  – listed along with an approximate percentage of how much each one counts  in making up your total score:

  • Payment history – whether you make payments on time (35%)
  • Total debt load and debt-to-credit ratio – how much you owe to all your creditors combined and how much of your available credit is in use (30%)
  • Length of credit history – how long you have been using credit (15%)
  • Types of credit – a mix of credit is good, including unsecured cards, mortgages, student loans or car loans (10%)
  • New credit – having lots of brand-new credit accounts don’t look as favorable (10%)

You actually have several different credit reports and scores. Each credit bureau keeps their own records, so you have a credit history and score with TransUnion, Experian, and Equifax. FICO calculates your credit score based on their own formula, which comes from a combination of information from different bureaus. Your credit score will fall somewhere between 300 and 850 – and higher is better.

Any score over 800 is considered excellent, while a score under 600 is considered subprime.

You can get your credit score for free.