Your credit score is determined based on information in your credit reports, which are maintained by the three major credit bureaus (Experian, TransUnion, and Equifax). Your credit reports contain information about your credit history, including your payment history, credit utilization, credit accounts, and any negative information such as late payments or collections. This information is used to calculate your credit score, which is a numerical representation of your creditworthiness.
There are several different credit scoring models, but the most commonly used one is the FICO score. This score is based on the following factors, with their relative weights:
- Payment history: 35%
- Credit utilization: 30%
- Length of credit history: 15%
- Credit mix: 10%
- New credit: 10%
Your payment history, credit utilization, and length of credit history are the most important factors in your FICO score, so it is important to focus on these areas when working to improve your credit. It is also important to remember that your credit score is not static and can change over time based on your credit habits and financial situation.