 TITLE: What Is a Bad Credit Score? CONTENT: What Affects Your Credit Score\n------------------------------\nThere are many—in fact, hundreds—of credit scores that lenders use to help make lending decisions. Several factors affect those credit scores. But in almost all credit scores, the two factors that affect your credit scores the most are your payment history and credit utilization rate.\n*   **Payment history**: With the FICO credit scoring models, your bill payment history makes up 35% of your credit score. Consistently making payments on time helps your score, while missing payments will hurt it. Furthermore, the longer your payment is late, the more your score will suffer. And recent late payments have a greater effect than those that happened further in the past.\n*   **Amounts owed**: FICO scores consider how much of your available revolving credit you're using at any given time, also called your credit utilization ratio, for 30% of your score. Your credit utilization ratio is based on the amount you owe on revolving credit such as credit cards compared with the total amount of credit that you've been extended. To calculate your ratio, divide all your revolving credit balances by your total credit limits on those accounts. The more you owe relative to your total credit limit, the more it could lower your credit score. In general, always try to maintain a ratio of 30% or less to avoid hurting your score. For top credit scores, keep your utilization under 6%.\nThere are three other factors that affect your credit score to a lesser degree.\n*   **Length of credit history**: This factor makes up 15% of your credit score and is based on the average length of time your accounts on your credit report have been open. The older your credit accounts are, the better it will be for your credit score.\n*   **New credit**: When a consumer applies for many new credit accounts in a short period of time, it can be seen as an indication of possible financial problems. This factor makes up 10% of a FICO score.\n*   **Credit mix**: The FICO scoring models also consider the different types of credit used by a consumer. A good mix of installment credit (such as home mortgages, student loans and auto loans) and revolving credit (such as credit cards and lines of credit) shows that you can manage different types of accounts, and this usually helps your credit. However, FICO doesn't recommend that consumers take out additional types of loans in an effort to improve their scores.\nFinally, certain types of negative information can adversely affect a credit score, such as bankruptcies, foreclosures and collections. END