State Treasurer of Iowa

Tip from the Treasurer: How is your credit score calculated?

Ever wondered what determines one’s 3-digit FICO® credit score? FICO scores are used in the majority of lending decisions in the U.S.; the higher the score, up to 850, the better. Understanding what goes into their calculation can make the difference when trying to build or maintain good credit.

Payment history (35%)

Have bills been paid on time for past credit accounts? This is the first question asked by any lending institution.

Amounts owed (30%)
How much money is owed compared to the total credit limit? A high percentage doesn’t necessarily mean a low score, but it may indicate a potential for late or missed payments.
Length of credit history (15%)
How long is the credit history? A longer credit history will translate into a higher score, but those with a shorter history may also have a high score, depending on the rest of their credit report. 
Types of credit in use (10%)
What kind of credit is being used? Credit cards, retail accounts, installment (such as auto or student loans) and mortgage loans offer a variety of ways to responsibly borrow money, but having all is not necessary. This factor is more important if the credit report does not have much other information. 
New credit (10%)
How often have credit accounts been opened in the recent past? Opening multiple accounts in a relatively short timeframe will end up hurting the overall score, especially if there is a short credit history.
For more information on FICO credit scores and their calculation visit myFICO. To receive a free copy of your credit report (offered annually by each of the three credit reporting agencies) visit
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