Payment history and debt totals are important parts but not the only factors in determining your FICO Score.

When it comes to Credit Scores, FICO is most common. Regardless of what credit report you obtain most people will refer to your credit score as your FICO Score. Almost all banks or Lenders in the United States use FICO scores to decide whether to offer credit to potential borrowers and at what interest rate. FICO has a major global presence, as well: According to the company's testimony before a House Financial Services Committee, FICO Score are used in about 10 billion decisions worldwide each year. Did you catch that, 10 BILLION.

So how does FICO or the correct name Fair Isaac Corporation, come up with its widely used score?

While the inner workings of the FICO scoring system are a closely guarded company secret, the company is open about the general components of a FICO Credit Score. Using the information in a borrower's credit report, FICO breaks that information into categories. Those five components each get different weights. FICO scores give the most attention to how you have paid back lenders in the past and how much you are using of the credit available to you, as shown on your credit report. Those two factors contribute roughly two-thirds of a typical person's FICO score as show below in the graph. Through their website, MyFICO.com they provide a wealth of information for the consumer including a breakdown of the various factors that make up a credit score.

Here's a breakdown of the five elements of the FICO Score:

1. Payment History: 35 Percent of the Total Credit Score

This part of the score is based on a borrower's prior payment history. Making the ontime repayment of past debt is the most important factor in calculating credit scores. According to FICO, past long-term behavior is used to forecast future long-term behavior.

FICO keeps an eye on both revolving loans -- like credit cards -- and installment loans, such as mortgages or student loans. Although the weight of each loan varies between individuals, FICO indicates that defaulting on a larger installment loan like a mortgage will damage a credit score more severely than defaulting on a smaller revolving loan. One of the best ways for borrowers to improve their credit score as a whole is by making consistent, timely payments.

2. Debt Amounts -- 30 Percent

This factor is based on a borrower's total outstanding debt in relation to their total credit limits. Revolving lines of credit are credit lines which allow a consumer to borrow as much or as little as desired up to the credit limits. Iinstallment loans are where a set amount -- say, $20,000 for a car -- is determined at the outset. Revolving lines are more heavily weighted here. Credit cards are a type of revolving account.

Since FICO views borrowers who habitually max out credit cards -- or who get very close to their credit limits -- as people who cannot handle debt responsibly, a borrower should maintain low credit card balances in relation to their credit limits. Experts recommend that the amount owed should not exceed 30 percent or less of the individual's credit limits. That 30 percent rule of thumb applies to each individual credit card as well as the overall level of debt. This can be especially tough for those that have low limits cards as it will not take much to exceed the 30 percent. Thus a person that owes $500 on a card with a limit of $500 is seen as more risky than a person that owes $10,000 on a card with a $30,000 limit. While this seems odd, it is about managing debt, not necessarily the debt amounts.

The final three components of a FICO credit score get less weight in the score's calculation. The remaining one-third of your score is determined by how long you have managed credit, to what degree you have pursued new credit recently and the variety of credit types you have successfully handled.

3. Length of Credit History -- 15 Percent

Based on the length of time each account has been open and the length of time since the account's most recent action. As a result, it is impossible for a person who is new to credit to have a perfect credit score. A longer credit history provides more information and offers a better picture of long-term financial behavior. Therefore, to improve their credit scores, individuals without a history should begin using credit, and those with credit should maintain longstanding accounts. One mistake people often make is closing older accounts. This can have a negative effect on your score so you may want to keep the older accounts open and just use them infrequently.

4. New Credit and Inquiries -- 10 Percent

Borrowers, even those new to credit, should avoid opening too many credit lines at the same time, since such behavior could suggest they are in financial trouble and need significant access to lots of credit. FICO suggests that borrowers only take on additional credit when they must have it or when it makes sense financially. This is also where Credit Inquiries fall. A borrower with a lot of recent inquiries will lose points from their score as it appears that they may be trying to open a bunch of new accounts.

5. Credit Mix  -- 10 Percent
Credit mix, meanwhile, is somewhat of a vague category, but experts say that repaying a variety of debt indicates the borrower can handle all sorts of credit. According to FICO, historical data indicates that borrowers with a good mix of revolving credit and installment loans generally represent less risk for lenders. Borrowers who frequent Finance Companies or other higher risk type of lenders may lose a few points here as well as those lenders are seen as higher credit risk lenders.

Knowing the various weights given to components of a FICO Credit Score give borrowers a better idea where to focus their attention. So to get a good score you mostly need a credit history with no reported late payments, as well as low reported balances currently on any credit cards. You can find out more about credit scores through the site MyFico.com.

Remember credit scores have nothing to do with your income, job type, education, race, divorce, job history or anything else other than what is described above.