How reliable is the credit scoring system?

The credit score is calculated by many different factors.

The FICO credit scoring system (which is the most common credit score used) is as follows:

Credit history 15%

Payment history 35%

Amounts owed 30%

New credit 10%

Types of credit used 10%

This scoring system is reliable because these factors are the most relevant to whether or not you are a risky borrower. Remember, your credit score helps to determine if you will be approved for a loan or line of credit and what type of interest rate you will receive on the loan.