Credit 101, What is your Fico Score Made up of

Finance & Accounting

FICO scores continue to serve as the first and most readily available indicator of credit risk. Therefore it is important to better understand what FICO scores look at. There are five categories that make up these scores:

  1. Payment History – 35%
  2. Amounts Owed – 30%
  3. Length of Credit History – 15%
  4. New Credit – 10%
  5. Types of Credit – 10%

As you can see, the most influential portion of this score is the payment history. The payment history is reported by credit grantors, including open and closed accounts. It is important to remember that payment in full does not remove the payment history.

Credit and collection accounts remain on the credit report for seven years plus 180 days from the date of the original delinquency and/or date of last activity. Courthouse records remain for seven years from the date filed. Bankruptcy chapters 7 and 11 remain for 10 years from the date filed.  While tax liens remain 10 years from the date filed as well, they could remain indefinitely if they go unpaid.

It is up to each individual to make sure his/her credit report is accurate. According to the FACT Act amendments to the Fair Credit Reporting Act requires each of the credit bureaus to provide consumers, upon request, one free personal credit report on any 12 month period.

Business credit is critical to the success of your business.  Often times business owners are not aware of the impact their personal credit has on their business.  Take action today by knowing what it being reported on your personal credit report.  We have listed some helpful links below to get you started.


  • Website recommended for free annual credit reports.  You are allowed one free copy each year for each of the credit bureau companies.
  • It does not come with a credit score for free but you have the ability to purchase your score at the time of ordering your free report.
  • Each of the bureaus now allows you to dispute any items on your report online.  They make it very easy.

  • Federal Trade Commission has valuable information regarding all things credit related.   The best way to navigate the site is use the search engine in the top right corner and type what you are looking for (i.e. credit repair, identity theft, credit report, etc).