How Is a Credit Report Graded?


Your credit report is one of the most important financial documents you have. Inside your credit report you can find a variety of information including loan accounts, credit cards, mortgages, late payments, account balances and public financial records. Because there is so much information contained in your credit report, the Fair Isaac Corporation (FICO) designed a scoring system that grades your credit report using a system of numbers. In this system, different aspects of your credit report are evaluated using a percentage system. The percentage system is then used to generate a score between 300 and 850 points.

Payment History

The largest weight of your credit score is determined by your payment history. Payment history revolves around paying the credit accounts on your credit report in a timely manner. Public records, such as bankruptcies and judgments, also negatively impact this portion of your score. Your payment history makes up 35 percent of your total score, or about 297 points. The better your payment history, the higher your credit score will be.

Amount Owed

The amount owed on the credit accounts detailed in your credit report makes up the next largest percentage of your total credit score. This percentage of your rating looks at the number of accounts you currently have a balance on, and how big those balances are in relation to your actual credit limit. Having high balances, such as maxing out credit cards, can negatively impact this number. The amount owed makes up 30 percent, or about 255 points, of your total credit score.

History Length

The length of your history also plays a part in how your credit report is graded. For example, someone who just became old enough to have credit would have a smaller score in this area in relation to someone who has had a credit history for many years. Credit history length gives creditors the ability to see how financially responsible you are over a long period of time. Your history length makes up 15 percent of your total score, or about 127 points.

New Credit

New credit also plays a role in your credit grading. For example, having too many new accounts or applying for too many new accounts can negatively impact your score. Having accounts in good standing that have been active for years positively affects your score. New credit makes up 10 percent, or about 85 points, of your credit score.

Types of Credit

The final percentage of your credit grading is types of credit. Types of credit revolves around having a healthy mixture of different credit types including loans, credit cards, retail accounts and mortgages. Approximately 10 percent, or 85 points, of your credit score is based off of the types of credit in your credit report.


Once each section has been calculated, the points are added up from each section to provide an overall score between 300 and 850. Your score can constantly change based off new information provided in your credit report. These changes can be both positive and negative, making it important to keep an eye on your credit report to be aware of your accounts and to be sure it is accurate.