In the land of all credit scores, FICO is king.  The majority of banks in the USA use FICO scores for whether or not they are going to lend you money, and at what interest rate.

So how does FICO come up with this score?  I'll break it down for you, below:

FICO Score Breakdown


1.) Payment History.  Based on you payment history, making the repayment of past debt is the most important factor when calculating credit scores.

2.) Debt Amounts.  This is based upon your total outstanding debt.  Removing lines of credit is the best thing you can do when getting rid of debt amounts.  Another thing to consider is not maxing out your credit limit with credit cards.  Try to maintain a good balance, and pay it off frequently.

3.) Length of Credit History.  This is the length of time each account has been open and the length of time since the account's most recent action.

4 and 5.) New Credit and Credit Mix.  Borrowers, even those new to credit, should avoid opening too many credit lines at the same time.  This behavior could be seen as someone in financial distress, and need instant access to a lot of credit.  Credit Mix is a little vague, though.  The thought on this is that borrowers should pay off different types of credit, to somehow prove that they are in control of their finances.

Where does your credit stand?

If you have any questions about your credit, credit worthiness, or what kind of interest rate you can get for a loan, please feel free to contact Joel Greer with Carolina One Mortgage at (843) 414-2489, or email him at  You can also visit him and determine your credit score at Carolina One Mortgage.


Posted by Mike Ciucci on


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