The Five Factors of Credit Scoring

Credit scores are comprised of 5 factors.  Points are awarded for each component, and a high score is most favorable.

There are three bureaus and each one may factor the scores slightly different.  Occasionally you may find that some credit information is only reported to 1 or 2 bureaus, instead of all 3.  This is why you may find each bureau reporting a different score.  Each bureau does an analysis of the following 5 factors:

Pay History

  • 35% of your score is impacted by your payment history.  Paying debt on time has the greatest positive impact on your credit score.  Late payments, judgements and charge offs all have a negative impact.  The most recent 2 years history will carry more weight than older items.

How much you owe

  • 30% of your score is impacted by the outstanding credit card balances compared to the available credit.  Ideally, you should make an effort to keep the balances as close to zero as possible or below 30% of the available limit.

Length of time

  • 15% of your score is impacted by length of time your credit accounts have.  Paying timely on accounts over a longer period of time, will have a positive impact on your score.

Types of credit

  • 10% of your score is impacted by the type of credit you have.  A mix of auto loans, credit cards, and mortgages is more positive than a concentration of debt on credit cards alone.  It is a good idea to keep 2 to 3 credit card accounts open at all times, remembering to try to keep the balances as low as possible.


  • 10% of your score is impacted by credit inquiries.  Each inquiry can cost from 3 to 15 points on a credit score depending on the overall credit history and the amount of the inquiries.  Also, inquiries by multiple companies for home loans, auto and student loans within a short period time of around 30 to 45 days, are only counted as a single inquiry and have little impact on your score.  When you pull your own consumer report through the agencies directly, this does not impact your score.

Remember that the credit score is a computerized calculation and does not take in personal factors.  It is merely a snapshot of that day’s credit profile and can even fluctuate from one week to the next depending on any changes in the reported data.

The credit companies typically report updates to the bureaus on balances, etc. at the time they print the monthly statements for that consumer.  It may still take another couple days for the bureaus to report the update.  While this is typical, there is no requirement and could vary depending on the creditor.

For additional information, please contact Julie Ozanich at 858-369-7510.  All loans are subject to qualifying and may have loan size restrictions. NMLS #479603.  Data provided by
Carmel Valley San Diego Community | Julie Ozanich | Bank of ManhattanWith a mission to provide a higher standard of mortgage lending services, Julie began her career in mortgage banking in 1990. To date, Julie has successfully closed over $1 billion in mortgage loans and helped over two thousand customers achieve their mortgage goals. Program availability may differ slightly in different states. Terms may vary. Subject to change without notice. Bank of Manhattan is not affiliated with nor endorses The Carmel Valley Life. NMLS# 401422.

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