Are you about to apply for a loan but you can't quite get the required credit score? It doesn't have to be hard.

The FICO score is arguably the most common scoring model, and there are various factors that lenders consider while calculating it. The better your credit score, the more likely you are to get the loan.

The good news is that you don't have to wait for lenders to tell you your score. You can get ahead of them by knowing what you need to do to improve your credit score. That said, in this article, we'll look at some of the factors that determine your FICO score.

1. Payment History

Your payment history shows how often you make your payments on time. It is the most significant factor, accounting for 35% of your FICO score. This is because lenders want to know if you're able to pay them back on time. Even one missed payment can dent your FICO score considerably and harm your chances of being approved for a loan.

Making all payments on time consistently answers the one question that lenders ask themselves before they approve loans; Will I get it back?

2. How Much You Owe

A FICO score considers your credit utilization ratio, which is the amount of money you owe compared to the available credit limits. Lenders love to see that you have a mix of various credit types and that you manage them all responsibly.

While having other credit accounts and owing money on them doesn't mean that you're a high-risk borrower, lenders may be particularly put off if you're using a lot of your available credit, which puts you at a high risk of defaulting. This is another crucial factor that accounts for 30% of your FICO credit score.

3. How Long You've Had Credit

Lenders love to look at your credit history before approving your loan request. How many years have you had credit obligations? How old is your oldest account? And what is the average age of all of your credit accounts?

This is the reason why personal finance experts advise leaving credit accounts open, even if you don't use them anymore. A short history is fine if you have made payments on time and don't owe too much, but generally, a longer one is best, as long as it's not marred by late payments.

4. Your Last Application for Credit

Your FICO score is also calculated according to how many credit accounts you have and how many you have applied for recently. Creditors assume that if you've opened several accounts recently and their percentage is higher compared to the total number, you are a greater credit risk. This means that the more you apply for credit, the lower your score goes.

Your new credit applications account for 10% of the total FICO score, even if they're not granted or you decided against taking them after applying. 

5. The Type of Credit You Use

There are different types of credit, including car loans, credit cards, student loans, and mortgages. Applicants with a higher FICO score usually have a more diverse portfolio of credit accounts. This accounts for 10% of your credit score and tells lenders how well you manage different types of credit, depending on how many of each you have.