You know that your FICO score (aka your credit score) is an important thing. Whether or not you are looking for a home mortgage loan, your FICO score can impact just about every aspect of your personal finance life. It can even affect whether or not you get a job, since many employers (especially in the security and financial industries) are reluctant to hire someone who could be seen as security risk.

But when you check your credit report, you don’t see what the credit bureaus consider important to your credit score. What do they look for? And how is your FICO score calculated? Well, it is a somewhat complex blending of different categories of financial responsibility. But here is a basic breakdown of the approximate value placed on different parts of your credit history.

35%: your payment history for your credit accounts (credit cards, car loans, etc.)
30%: oustanding debt, including how much debt you have in relation to your income
15%: how long you have had a credit history
10%: whether you have opened or applied for new credit accounts recently
10%: a look at the types of credit accounts, and how much of your debt they make up

Click here to read about a plan for improving your credit score.

Tags: credit report, personal finance, FICO score, finances,
home loan, check credit report, credit score, credit bureaus