You’ve probably heard people refer to the idea of a “credit card score” and you may wonder exactly what this number is all about and what impact it can really have.  Let’s take a look at the concept, how it’s used, and how the score itself is derived.

First, however, it’s worth noting that there really isn’t such a thing as a “credit card score”.  Many people use that expression when discussing their credit scores because they’re interested in obtaining a credit card.  In reality, most credit card lenders use a proprietary credit rating system that is often either based on, or is consistent with, a FICO score.

FICO, devised by the Fair Isaac company, is a three digit number that’s supposed to be reflective of an individual’s credit worthiness.  Numbers range from between 300 and 850.  As you’d probably guess, very few people fall on either extreme of the range.  Think in terms of a standard bell curve distribution and you’ll have a good idea of how the numbers sort out.

A FICO score that falls under 580 is considered inferior and can make it very difficult to obtain an unsecured credit card.  Those with scores over 680, however, will be considered great credit risks and can get the best possible card offers.  Everyone else falls into the middle with “fair” credit.

What goes into determining one’s credit card score?  There are five different elements at play.  Let’s look at each of them and how significant they are in determining one’s “magic number”.

Over one-third of score is based on one’s payment history.  If you have a good record of paying your bills on time, it will aid your credit card writing accordingly.  Those who miss payments or who are frequently late can expect to have a lower score.

About thirty percent of your FICO score stems from your debt to income ratio.  If you carry very little debt relative to your actual income, you are considered a better credit risk than others.  Those who are “overextended” invariably find their FICO numbers dropping.

Approximately fifteen percent of the score is a matter of how long you’ve been in the game!  A long credit history is worth more in terms of your credit card score than a short one.  That track record lends a degree of predictability to lenders.

The kinds of credit you have can influence your score by as much as ten percent.  Those who have different forms of loans generally have a higher FICO score, all other things being equal.  On the other hand, those who realize exclusively on one form of credit (i.e. personal loans or credit cards) don’t do as well.

Finally, the amount of new credit you’re building accounts for about ten percent of your FICO scores.  It makes sense of lenders to question the desirability of extending credit to someone who is in the process of suddenly amassing more and more debt.

If you can manage these five characteristics effectively, you can get your FICO score up.  This is a good way to improve your “credit card score” and to qualify for the best deals on credit cards.  If you want higher limits, better rewards and lower interest rates, do whatever it takes to improve your FICO score.  With a little patience and effort, you can push your score up near (or over) the 680 mark.