Matt Olson

Jul 24 2017

Credit Score Series: What Makes Up Your Credit Score

Credit Score Series: What makes up your credit score?

Your credit score directly impacts your ability to get a loan and the rate and terms you pay for those loans. It also plays a role in things like your insurance rates, security deposit needed when you rent an apartment, and even your cell phone payment plan options. As important as credit scores are for each of us, there is often confusion and misunderstanding on what influences that three digit number.

Watch my video and I’ll provide tips for improving your credit score.

There are five categories that make up your credit score. Each category has a different level of impact on your credit score, which is represented by their percentages. For example, payment history plays a large impact at 35%, whereas credit mix has a relatively low impact at 10%.

  • Payment History – 35%
    How you have paid creditors in the past is often a good indicator of how you will pay in the future. Payment history, both good and bad, typically has the largest impact on your credit score, which is why it is so important to make timely payments.
  • Amounts Owed
    Total amounts owed to creditors, number of accounts with balances, and the percentage owed in relation to your credit limit all play a role in your credit score.
  • New Credit
    Number of new accounts, amount of recent credit inquiries, and the length of time since credit inquiries were made account for about 10% of your credit score. Even though credit inquiries impact your score, it’s usually minimal. Additionally, when multiple lenders pull your score within a short period of time, it usually only counts as one inquiry.
  • Length of Credit History
    Your credit score considers the age of your oldest and newest accounts, the average age of all accounts, and how long it’s been since you’ve used them. Usually the longer you have managed credit, the higher your credit score will be.
  • Credit Mix – 10%
    Credit mix is the variety of credit account types that you have. Different types include credit cards, personal loans, store loans, and mortgage loans. You don’t need to have all these types of credit to have good credit, but people with installment loans and credit cards with good payment history tend to have higher scores.

Thanks for watching my video. Feel free to leave questions or comments below!

View the complete Credit Score Series:


Matt Olson

About Matt Olson

Matt Olson is Vice President, Mortgage Lending at Coralville's location at 1009 2nd Street. He has been at Hills Bank since 2004 helping customers with home purchases and refinancing needs. Matt can be reached at

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