What Goes Down Into Your Credit Score?

(June 2024)

What Goes Down Into Your Credit Score?

In This Article

Your credit score reveals your credit standing and also plays a key role in whether or not you are going to get a loan of your choice. Under some circumstances, even your employer uses your credit score to know whether you are a reliable person or not. Various service providers and utility companies look into your credit score to decide if you need to make an initial deposit before they offer you their service.

Want to know what influences your credit score’s rise or fall?

Read this article to fully understand why your credit score is decreasing and how to raise it to an acceptable standard. Continue reading to the end to learn more about this topic.

To Know What Goes Down into Your Credit Score:

  1. Understand Factors That Influence Your Credit Score
  2. Understand What Makes a Good or Bad Credit Score
  3. Know the Difference Between FICO and VantageScore
  4. Learn How to Check Your Credit Score and Report (for Free)
  5. Learn How to Dispute Items in Your Credit Report

Eager to know more about the points above? Let’s dig deeper!

1. Understand Factors That Influence Your Credit Score

To comprehend what enters your credit score, know the factors that affect it.

These factors may vary from one scoring company to another. For example, FICO Score (the credit score that about 90% of lenders in America use) uses five criteria, which are in percentages, to calculate your score.

Consider the following elements:

Payment History (35%)

Your payment history is the most important criterion in your credit score, with a percentage portion of 35%. To have a good payment record, pay your outstanding debts and bills, and also cultivate a timely payment habit on your credit cards and other credit products.

Amounts You Owe (30%)

The next most important factor in your credit score represents your credit usage. Make sure you don’t exceed 30 percent of your available credit so that you don’t appear negative to your lenders.

Length of Your Credit History (15%)

The time you spend on a credit account makes up 15% of your credit score. Criteria for determining this include the age of your oldest credit account, the age of your newest credit account, and the average age of your total credit accounts. The longer your credit accounts, the better your credit history, and the higher your credit score. Never be too quick to close credit accounts that are no longer in use.

New Credit You Apply For (10%)

When you are trying to open a new credit account, you may suffer a hard inquiry from the lender, who may want to pull your credit score to assess your creditworthiness. Trying to open too many credit accounts also attracts too many hard pulls on your credit score, which in turn makes you a higher risk to lenders. The numbers of your recently opened accounts account for 10% of your credit score.

Types of Credit You Use (10%)

The type of credit account (car loan, student loan, mortgage, credit account, etc.) and the number of accounts you possess in each category indicate how well you can manage credit products. The type of credit you use accounts for 10% of your credit score.

2. Understand What Makes a Good or Bad Credit Score

To be aware of what goes into your credit score, know what determines a good credit score or a bad credit score. A good credit score gives you the eligibility to get credit products at lower interest rates without experiencing some difficulties in getting certain types of credit. A bad credit score may lead to the approval of credit products at higher interest rates because your profile appears as a greater risk to the lender.

What determines the good or bad of your credit score depends on where you find yourself on the scoring range digit, which starts from 300 to 850. Your credit score may fall into one of these categories, according to the FICO scoring model:

  1. Poor credit: 300-579
  2. Fair credit: 580-669
  3. Good credit: 670-739
  4. Very good credit: 740-799
  5. Excellent credit: 800-850

3. Know the Difference Between FICO and VantageScore

To know why your credit score goes down, know what VantageScore and FICO Score are. VantageScore and FICO Score are two major scoring models in the U.S. with a similar scoring range of 300 to 850. Your credit report must have at least a 6-month-old tradeline before FICO can calculate your credit score, while VantageScore requires no minimum trade history.

Furthermore, a good FICO Score starts at 670, while a good VantageScore is anywhere from 601 onward.

4. Learn How to Check Your Credit Score and Report (for Free)

To track what finds its way into your credit score, know how to check your credit score for free. Visit AnnualCreditReport.com to check your credit score online from the big three reporting agencies. You can directly request a free copy of your credit score from each of the three major credit reporting agencies (Experian, Equifax, and TransUnion) once every 12 months.

You also have the right as a consumer to see your report for free if any financial institution denies you access to credit. Also, you can create an account with a credit score provider to have access to your credit score.

For example, see FICO Score Open Access and My Equifax Account. In addition, some card issuers do offer complimentary credit scores with your credit report statement.

5. Learn How to Dispute Items in Your Credit Report

To keep track of the factors that determine your credit score, learn how to dispute items that you feel are not true in your credit report.

Request your credit report from the credit reporting agencies. Vet your report for inconsistencies or inaccuracies. Highlight the errors and keep a copy for yourself. Then file a dispute letter against the reporting agency that supplies the information.

Explain in your letter what you think goes wrong, why it happens, and attach supporting documents to your letter. After doing this, the reporting company in question has 60 days to respond to you or remove the error from your report.


To monitor what gets into your credit score, understand the occurrences that impact your credit score. Find out the concept behind a good credit score and a bad credit score.

Also know what differentiates the two major scoring companies, the FICO Score and VantageScore. In addition, know how to view your credit score and know how to dispute any unfamiliar items in your report.

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