Your credit score, or FICO score, is essentially a calculation used by lenders to determine your eligibility for a loan, how much you can borrow and the corresponding interest rate.

Previously, your credit score was a mysterious, hidden computation that was primarily based on your payment history. Today, the breakdown of your score is a more clear-cut computation based on numerous important factors.

The five different factors used to calculate a score range of 300-850 need to be carefully examined and understood:

  1. Payment history
  2. Amounts owed
  3. Length of credit history
  4. Credit mix
  5. New credit

To learn more about the FICO Score Calculation, read here