FICO Score Factors

Your individual FICO score is made up of five factors of varying importance.

Here is how your use of credit cards can affect each of these components:

• Payment history.

This accounts for 35 percent of your FICO score.

When you have any late payments, the score will take into account how much was owed, how late you were and how many late payments there were.

If your overall report is strong, a few late payments shouldn't hurt your credit score too much.

• Credit use.

Thirty percent of your score is determined by your credit utilization ratio: your outstanding balance as compared to your available credit.

If you have outstanding debt and cancel a credit card, the loss of that line of credit will mean you're using up more of your credit, which will raise your credit utilization--thus lowering your credit score.

Experts say it's best to use 30 percent or less of your available credit limits.

• Length of credit history.

This determines 15 percent of your score.

If you're closing credit cards, keep the card you've had open the longest.

One alternative to closing your accounts is letting them sit, but be certain to check on them periodically to make sure identity thieves aren't using them.

If you want to make sure your credit cards are counting toward your credit utilization ratio, be sure to use them at least once about every six months.

Otherwise, inactive accounts will show up on your report and the credit line won't be factored into your utilization ratio.

• New credit.

This makes up 10 percent of your score, but signing up for new credit cards doesn't necessarily boost your score because you're adding to your line of credit.

Instead, this could lower your score because you might appear to be a bigger credit risk.

• Types of credit in use.

This makes up the final 10 percent of your score, and determines whether you have a mix of different types of credit, such as installment loans or mortgages.

It's a good idea to have a history of revolving credit accounts, so think twice before giving up your credit cards.

Source: Fair Isaac Corp.

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