Although different procedures are used to calculate credit scores, most are credit scores are based in part upon the following variables:
Payment Record: A history of on time, in-full payments will raise your score whereas both missed and late payments and loan defaults will lower it.
Total Debt: Low debt, especially if it includes a low debt to debt-capacity ratio will increase your score, especially if you have an active record of on-time and in-full payments. The opposite will lower your score and may do so even if your overall debt is not extraordinarily high.
Types of Debt: The more different kinds of debt you have the better. Follow the "good mix" rule just as you do when investing a 401k for example. Too much credit card debt will lower your score whereas a home mortgage, car loan, and credit card debt - with a strong payment record - will increase your score.
Duration of Your Credit History: The "rule of thumb" is simple. The longer your credit history the better your score will be and the shorter it is the lower your score will be.
Inquiries: The more potential lenders review your credit reports the more they may lower your overall score, may being key here. The rule when it comes to inquiries is as follows: Consumer-driven inquiries, those you instigate, can adversely affect your credit score. Those undertaken by creditors seeking to offer "pre-approved" loans, current creditors reviewing an account, potential employers, and individuals reviewing their own credit do not affect one's credit scores (more on this below; see Legends of Credit Scoring).
Bankruptcies, Judgments, and Collections:Remember the rule, "Everything counts." If you declared bankruptcy or had a judgment or collection against you it will most likely lower your credit score and, depending upon the actual circumstances, may do so for quite some time (bankruptcies will stay on your credit report for seven to ten years depending upon the state you in which you reside).
Joint Accounts: Joint loan accounts, including co-signatures on a loan, can affect one's credit score. The borrowing and payment habits of someone you may have sought to help can, and generally will, impact your credit score. Once again, it pays to be prudent. Know that someone else's slow payments or default can become your nightmare.
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