In my experience, there appears to be a great deal of confusion about what makes up a persons credit score and what affects it the most.

In the insurance business, as an employer, as a landlord, and in real estate (indirectly) I am involved in discussing credit scores with the public. I’ve had people tell me their credit is bad and it turns out reasonably good, and I’ve had people tell me their credit is “ok” only to find that it is horrible.

Credit scores are calculated from all the data in your credit report. This data can be grouped into five categories as outlined below. The percentages in the chart reflect how important each of the categories is in determining your (mortgage) credit score. Different uses for credit reports, such as employment or insurnance generally weigh criteria differently.

These percentages are based on the importance of the five categories for the general population. For particular groups – for example, people who have not been using credit long – the importance of these categories may be somewhat different.

Payment History

Account payment information on specific types of accounts (credit cards, retail accounts, installment loans, finance company accounts, mortgage, etc.)
Negative public records (bankruptcy, judgements, suits, liens, wage attachments, collection items, and/or delinquency (past due items)

Severity of delinquency (how long past due)
Amount past due on delinquent accounts or collection items
Time since (recency of) past due items (delinquency), adverse public records (if any), or collection items (if any)
Number of past due items on file
Number of accounts paid as agreed

Amounts Owed

Amount owing on accounts
Amount owing on specific types of accounts
Lack of a specific type of balance, in some cases
Number of accounts with balances
Proportion of credit lines used (proportion of balances to total credit limits on certain types of revolving accounts)
Proportion of installment loan amounts still owing (proportion of balance to original loan amount on certain types of installment loans)

Length of Credit History

Time since accounts opened
Time since accounts opened, by specific type of account
Time since account activity

New Credit

Number of recently opened accounts, and proportion of accounts that are recently opened, by type of account
Number of recent credit inquiries
Time since recent account opening(s), by type of account
Time since credit inquiry(s)
Re-establishment of positive credit history following past payment problems

Types of Credit Used

Number of accounts (credit cards, retail accounts, installment loans, mortgage, consumer finance accounts, etc.) “Good” Credit, such as mortgages help build your score, whereas “bad” credit such as excessive credit cards or payday loans may detract from your score.