Do You Know the 5 Factors of FICO® Scores? Quiz Time!
, by Rob Kaufman
There are 5 factors (categories of credit data), that make up your FICO® Score. These factors are:
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Payment History
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Amounts Owed
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Length of Credit History
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Credit Mix
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New Credit
So... how much do you know about each of these factors? We've created the "5 Factor Quiz" to help you test your knowledge about what makes up your credit score. And the best part? You can possibly learn new factor facts you might otherwise never have known. Good Luck!
5 Factors of your FICO Scores Quiz
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"Payment History" makes up X% of your FICO®
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15%
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25%
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35%
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45%
Answer: C . Payment history is an indication for lenders and creditors whether an individual is a lending risk due to a history of late or missed payments. Of all 5 factors, this one makes up the largest amount of your FICO® Score.
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"Credit History" is composed of 3 parts. Which one below is NOT one of those 3?
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How long each of your accounts has been open
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How long specific account "types" have been open (i.e. installment, revolving)
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The length of time since those accounts have been used
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The amount of time you've had a checking or savings account
Answer: D . To find these three items (A, B and C above) look no further than your credit reports. Within your reports (Experian, Equifax and Transunion), there's a listing of all your accounts, the type of account, the date each was opened and the last time you used each account.
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"Amounts Owed" refers to the percentage of your total debt compared to the amount of your credit limit.
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TRUE
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FALSE
Answer: B . "Amounts Owed" refers to how much total debt you carry. Credit Utilization is the percentage of your total debt compared to the amount of your credit limit - a very significant part of your FICO® Score's calculation.
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"Credit Mix" includes the different "types" of credit you have . For example: revolving accounts, installment accounts, open lines of credit, etc. An example of a revolving account would be:
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Mortgage
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Student Loan
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Retail Store Card
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Monthly Cable Bill
Answer: C . Revolving accounts are those that provide you with credit that allows more flexibility regarding the amount paid monthly (subject to any minimum payments required, and payment due dates, etc.). Some of these include: Credit Cards, Retail Store Cards, Gas Station Cards and HELOC (Home Equity Line of Credit).
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"New Credit" comprises 10% of your FICO® Applying for new credit can:
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Increase Your FICO® Score
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Decrease Your FICO® Score
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Increase or Decrease Your FICO® Score
Answer: C . Depending on the specific situation, "New Credit" can increase or decrease one's FICO® Score. For instance, when applying for new credit, an inquiry is placed on your credit report. Taking other credit report information into account, this "hard inquiry" can lower your score by a few points. However, if the new line of credit helps diversify the types of accounts you currently have, this can increase the "credit mix" factor of your credit score.
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AAoA is very connected to "Credit History". The letters AAoA stand for:
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Average Account over Assets
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Average Age of Accounts
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Account Advantages over Assets
Answer: B . FICO's formula for helping to determine your Length of Credit History also includes the Average Age of Accounts (AAoA). This number is calculated using your oldest and newest accounts divided by your total number of accounts. AAoA can affect your credit score in a number of ways. For instance, if you miss a credit card payment (or two), it could have more of an impact on your FICO® Score if you have a shorter credit history. On the other hand, if you have a very long history showing consistently on-time payments and miss a mortgage payment or open a new account, the damage to your score could be less.
To learn more about the 5 factors that make up your FICO® Score, check out any of the myFICO blogs below:
Rob is a writer... of blogs, books and business. His financial investment experience combined with a long background in marketing credit protection services provides a source of information that helps fill the gaps on one's journey toward financial well-being. His goal is simple: The more people he can help, the better.