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To understand the anatomy of a credit score, you should begin by looking at a credit report, what it includes and how it is used by lenders. The credit score breakdown is based on information available to credit bureaus in a credit report.  

Understanding a Credit Report

A credit report has seven sections and is a detailed summary of your borrowing history. It includes your personal consumer information, employment records, public records information, adverse accounts, satisfactory accounts, credit inquiries and account review inquiries. A personal consumer statement is optional and allows the consumer to dispute items on the report or provide context for derogatory information. 

The Parts of a Credit Report

  1. Personal Consumer Information
  2. Employment Records
  3. Public Records Information
  4. Adverse Accounts
  5. Satisfactory Accounts
  6. Credit Inquiries
  7. Account Review Inquiries
  8. Personal Consumer Statement (optional)

Lenders use the report to make decisions about approving credit. Since credit reports are lengthy, lenders use credit scores to quickly rate a consumer’s financial health. Scores range from 300 to 850 and different ranges represent a consumer’s level of risk.  

What Is the Breakdown of a Credit Score?

The breakdown of credit scores depends on the scoring model used. Information on your credit report, such as payment history, account balances, credit utilization, credit age, and credit mix, is used to rate your creditworthiness from 300 to 850 (in most cases.) The scoring model algorithms vary, but the two most common are FICO® Score and VantageScore. 

FICO: a brand acronym for the Fair Isaac Corporation

FICO® Score: a branded credit score created by FICO

VantageScore: a company name and branded credit score

These models have many differences and some similarities. They weigh information from the credit report in order of importance, using percentages. FICO uses five key factors while VantageScore uses six.

There is some overlap between factors. For instance, both models put significant importance on payment history. However, FICO is more concerned with current credit balances than VantageScore. 

VantageScore rewards consumers for having a low debt-to-credit ratio. New credit applications will have a greater impact on your FICO score than your VantageScore. 

Credit Score Breakdown Chart: FICO® vs. VantageScore

FICO® ScoreVantageScore
Payment history: 35%Payment history: 40%
Credit balances and utilization: 30%Length of history and types of credit: 21%
Length of your credit history: 15%Current credit utilization: 20%
New credit applications and approvals: 10%Current credit balances: 11%
Existing mix of credit accounts: 10%Recent loan or credit applications: 5%
Available credit amounts: 3%

Source: Bankrate 

Which Part of My Credit Score is Most Important?

Payment history is by far the most important part of your credit score. It is weighted highly by both major scoring models although VantageScore gives it slightly more weight than FICO. Making on-time or early payments on your credit is a reliable way to improve and maintain your credit score. 

After payment history, credit utilization is the next most important factor. Credit utilization and balances are combined to make up 30% of your FICO, while VantageScore separates them into two categories. Utilization makes up 20% of your VantageScore. 

Neither FICO nor VantageScore is particularly transparent about how public records information or adverse accounts are weighed in their algorithms.

Bankruptcies, for example, will have a negative impact on your score but the weight is not disclosed in the publicly available data. The same is true for charge-offs and resolved debts. 

What is a Good Credit Score?

Credit scores typically range from 300 to 850, a precedent established by FICO. When it was first introduced VantageScore used 501 to 990. That meant scores had to be converted to be compared. In 2013, VantageScore launched its 3.0 version to use the 300 to 850 scale. 

Although they use the same scale, the ranges for grouping scores into categories like fair or very good do vary between models. 

The threshold for an exception or excellent score is much higher with FICO. VantageScore tends to be more forgiving for those who struggle with high current credit balances. 

FICO® ScoreVantageScore
800-850 Exceptional
740-799 Very Good
670-739 Good
580-669 Fair
300-570 Poor
781-850 Excellent
661-780 Good
601-660 Fair
500-600 Poor
300-499 Very Poor
Sources: FICO and VantageScore

How Does a Credit Report Work?

If your financial health is good and your report shows positive behaviors like on-time payment, good credit mix, and low credit utilization your score will be higher and lenders will be more likely to approve you for credit. Higher scores mean better loan terms and interest rates. 

On the other hand, if your credit report shows negative “symptoms” like late payments, high credit utilization lenders will view you as financially unwell and will be less likely to offer you credit. 

Good Habits That Will Improve Your Credit Score

If you struggle with your financial health, attempting to improve your credit score can feel like a daunting task. Instead of focusing on the number, shift your focus to good habits that will resolve your current debt and prevent future debt from getting out of hand. 

If your debt is out of control and you struggle to keep up with payments, consider reorganizing your debt so that your monthly payments are manageable. Automating your payments so you never miss a due date can have a positive impact on your credit over time. 
Check out other tips to improve your credit score.

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