What factors are used to calculate one's credit worthiness? I believe this is a non-localized topic, so I am interested in hearing factors that are used from all over the world. It is possible that the various banks will include different factors into their individual credit rating, so it is good to know what they could use now or in the future.

I am currently aware of the following factors:

  • Late payments of bills
  • How stable the income is and for how long it has been stable

I do not want to turn this into a brainstorming session, so please only include factors that you know are currently being used.

1 Answer 1


There are many factors in your score. In the U.S. the most common factors you will find listed include:

  1. Credit Utilization - This is the percentage of credit you have used to what has been extended to you. If I have 2 credit cards, one with a $1000 limit and one with a $5000 limit then I have $6000 of available credit. This percentage is generally considered a very important factor to your credit score. For instance let's say I have a $4000 balance on the $5000 card, and a $0 balance on the card with the $1000 limit. Thus my utilization is 66.67%, if I close the card with the $0 balance, my utilization percentage will then jump to 80%. This will decrease your score, as you are seen as higher risk.
  2. Hard Inquiries - This is how many times your credit report has been pulled due to requesting new credit. These will stay on your report for 2 years, with the highest impact occurring during the first year. Pulling your own credit score does not impact your score; applying for a new credit card, loan, mortgage, etc... will. This is also generally considered a large part of your score.
  3. Percent of On-Time payments - This one is pretty explanatory. Don't pay your bill late, and you won't have to worry about any negative impacts to your score.
  4. Average Age of Accounts - Take the number of accounts you have, and average up how old they are. While a smaller portion of your score, this is why you will come across all sorts of information about not closing your oldest account, as it will drive this number down.
  5. Total number of accounts - I'm not very certain how this impacts your score. It seems the higher the number the better. I would bet there is some limit where going over would decrease the score, but I am not certain. The more accounts you have maintained a successful relationship helps the lender realize you are less risky.
  6. Collections Notices - These can be added by agencies, by having a lien on an account, bankruptcies, etc... These stay on your account for a number of years, and will have large effects on your score (in a negative way). What's worse, is paying them off or certain activities (in certain cases) can reset the clock on when they drop off your report.
  • 2
    This is a great summary of the FICO scoring in the US and I believe, Canada. It's important to note what's missing. FICO doesn't take income into account. It's for my bank to ask me for income data and employment information. If Bill Gates cancelled all his credit cards and got a new Visa Reward card, his score will drop. Commented Sep 22, 2011 at 21:30
  • I did forget to touch on that. The only time that income is going to come into question it seems is when requesting a mortgage (and we all know how well US banks did at ensuring what we report is true in the past...). I have always self-reported income for credit applications, and have yet to be asked for a tax return, pay stub, proof of employment etc... I have however been asked for these documents when renting.
    – Scott
    Commented Sep 22, 2011 at 21:35
  • In the old days, Bank wanted to see prior 2 years tax returns, 2 years of bank statements showing where deposit came from, and proof of employment. My last refinance, they asked for my driver's license. But my debt to equity is so low I suppose it didn't matter. Commented Sep 22, 2011 at 22:33

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