How is your credit score calculated?

You’ve heard of credit scores and you might have even checked your own, but do you really understand what they are, where you can find them and how they are calculated?

What is a credit score?

Credit scores are calculated by taking information from credit reports and analyzing data to forecast how someone is likely to behave in the future. By examining certain factors – like how much debt consumers carry and whether they have paid their bills on time in the past – companies can predict whether someone might pay a new bill on time or how they will handle a credit line increase.

How is my credit score calculated?

Your credit score is based on the following five factors:

PAYMENT HISTORY | This accounts for 35% of your score. It shows whether you make timely payments, how often you miss payments, how many days past due you pay your bills and how recent missed payments occur. The higher your proportion of on-time payments, the higher your score will be.

LOANS AND CREDIT CARDS | The amount of money you owe makes up 30% of your score. This is based on the amount of money you owe, the number and types of accounts you have and the proportion of money owed compared to how much credit you have available. High balances and maxed-out credit cards will lower your score, but smaller balances paid on time will raise it. New loans with less payment history may temporarily drop your score, but loans that are closer to payoff will increase it.

LENGTH OF CREDIT HISTORY | This accounts for 15% of your score. The longer your history of making timely payments, the higher your score will be.

TYPES OF CREDIT | The types of accounts you have make up 10% of your score. Having a mix of accounts including installment loans, home loans and credit cards may improve your score.

NEW CREDIT | This makes up the final 10% of your score. If you’ve opened or applied for numerous accounts, it suggests potential financial trouble and can lower your score. However, if you’ve had the same loans or credit cards for a long time and pay them promptly, your score will increase over time.

Where can I find my credit score?

Even if you don’t have any plans of opening a new account or taking out a loan in the future, monitoring your credit report is important. That’s why TruStone Financial encourages members to use to get information from three of the top ranked credit-scoring agencies in the country. If your report is looking a little confusing, feel free to bring it into your nearest branch and a banker will gladly help walk you through it.

TruStone Financial recognizes the importance of financial knowledge and is here to provide you with a wide range of helpful information to support your financial success. For more on financial literacy, member security tips and event information, visit


Editor’s note: segments of this article were taken from and