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Credit scores seem mysterious. The FICO credit score, which will be the subject of today's quiz, is used by 90% of top lenders to determine credit risk. Many loan decisions are heavily based on a three digit number that represents your credit risk to lenders. Sometimes your credit score will determine whether you qualify for a loan. Other times your credit score will determine what interest rate your lender can offer you. This three digit number can have a huge effect on your financial life. Luckily, credit scores aren't as complicated as most people think. Credit scores are calculated based on information from your credit report, which shows how you have used credit in the past. Credit scores use five main categories of credit information including payment history, amounts owed, length of credit history, credit mix and new credit to calculate your score. Each category determines a rough percentage of your actual credit score. After you understand how important each credit score factor is, you can do a better job at either increasing or protecting your score. You'll want to pay special attention to the largest credit score factors to make sure you earn as many points as possible. That said, you won't want to ignore the smaller factors, either, because every point counts when you're trying to get the best interest rate on a mortgage. When you take a step back and look at the big picture of how credit scores are calculated, it is really quite simple. The basic formula is public and the information used to calculate your score can be verified by obtaining a free credit report from the government mandated site annualcreditreport.com. Once you have this information, increasing your credit score is as simple as doing what the credit score likes to see and waiting for your score to increase.