What are the two most heavily weighted components of a FICO credit score?

What are the two most heavily weighted components of a FICO credit score?

• A. Length of credit history and types of credit used
• B. Payment history and recent inquiries
• C. Payment history and amounts owed
• D. Credit mix and new credit

Answer: (C)

The two most heavily weighted components of a FICO credit score are payment history and amounts owed. Payment history accounts for 35% of the credit score, reflecting how timely an individual has been with their payments on credit accounts. It shows lenders how reliable a borrower is in repaying their debts. The amounts owed, which comprise 30% of the score, evaluate the total amount of debt an individual has relative to their credit limits, indicating how much of their available credit they are utilizing. Together, these two factors make up a significant 65% of the total credit score, making them critical for lenders when assessing creditworthiness. While other components like length of credit history and types of credit used do influence the score, they carry less weight than the payment history and amounts owed. Recent inquiries and credit mix, while also relevant, do not have the same impact as the heavier weighted components. Therefore, understanding the importance of payment history and amounts owed is crucial for anyone looking to improve their credit score.

The two most heavily weighted components of a FICO credit score are payment history and amounts owed. Payment history accounts for 35% of the credit score, reflecting how timely an individual has been with their payments on credit accounts. It shows lenders how reliable a borrower is in repaying their debts. The amounts owed, which comprise 30% of the score, evaluate the total amount of debt an individual has relative to their credit limits, indicating how much of their available credit they are utilizing. Together, these two factors make up a significant 65% of the total credit score, making them critical for lenders when assessing creditworthiness.

While other components like length of credit history and types of credit used do influence the score, they carry less weight than the payment history and amounts owed. Recent inquiries and credit mix, while also relevant, do not have the same impact as the heavier weighted components. Therefore, understanding the importance of payment history and amounts owed is crucial for anyone looking to improve their credit score.