A step-by-step, example-rich answer to the exact long keyword and everything you need to rank and educate readers.
The exact long keyword we’re answering (verbatim)
Short answer — immediate and clear
The correct answer is: their history of payments made to lenders. Payment history is part of the formula that determines a person’s FICO score and is the most heavily weighted single component.
Everything else listed in the long keyword — investment percentage, income during a year, and the dollar amount in savings — is not part of the FICO formula. More below.
What is a FICO score?
FICO (Fair Isaac Corporation) is a company that created a credit scoring system used by most lenders in the U.S. and in many other countries. A FICO score is a three-digit number (usually between 300 and 850) that summarizes a person’s credit risk based on information contained in their credit reports.
The number is designed to predict the likelihood that a person will repay debts as agreed. Lenders use it to decide whether to approve loans, set interest rates, and determine credit limits. Because it is so widely used, understanding what influences your FICO score is crucial.
The five factors FICO uses — full explanation
FICO does not publish a line-by-line formula, but it does publish the relative importance (weights) of the five major categories used in its models. These approximate weights are the industry-standard reference:
| Factor | Approximate weight | What it measures |
|---|---|---|
| Payment history | 35% | Whether you pay on time — late payments, collections, charge-offs, bankruptcies. |
| Amounts owed / Credit utilization | 30% | How much of your available credit you are using (balances relative to limits). |
| Length of credit history | 15% | How long your accounts have been open; average age of accounts. |
| Credit mix | 10% | Variety of credit types — revolving vs installment vs mortgage. |
| New credit / inquiries | 10% | Recent applications and newly opened accounts. |
Important: Notice that neither income nor investment allocations nor savings balances are listed. That’s because FICO evaluates credit behavior, not cash-on-hand or salary.
Deep dive: Payment history — why it matters and how it’s recorded
Payment history is the largest component of FICO for a clear reason: past payment behavior is the most reliable predictor of future defaults. The credit bureaus record payment performance on each tradeline (credit card, loan, mortgage) and this history is analyzed by the scoring models.
Elements embedded in payment history
- On-time payments: The number and recency of on-time payments are positive signals.
- Late payments: 30, 60, 90+ days late; later and more recent delinquencies hurt more.
- Default and charge-offs: Loans written off by the lender are major negatives.
- Collections: Accounts sent to collections damage scores.
- Public records: Bankruptcies, foreclosures, tax liens (public records impact).
Example: A single 30-day late payment may reduce a middle-range score (e.g., 650) by 60–110 points, depending on the rest of the profile. A 90+ day late or a bankruptcy will have a larger, longer-lasting impact.
How payment history is updated and how long negatives last
Most late payments and collection entries remain on credit reports for up to 7 years. Chapter 7 bankruptcies can remain for up to 10 years. However, their effect lessens over time, especially if you demonstrate consistent on-time behavior afterward.
1. “the percent of income that they invest into mutual funds”
While investing is smart for long-term wealth, how much of your income you invest in mutual funds is not reported to credit bureaus and therefore not used in FICO calculations. Investment behavior is outside the credit-reporting ecosystem.
2. “their income level during a one year period”
Income matters to lenders when they underwrite a loan (to assess debt-to-income ratio and repayment capacity), but it is not part of the FICO algorithm. Your salary does not directly change your FICO score — only your credit behaviors do.
3. “the dollar amount in their savings funds”
Cash or savings balances are not reported to credit bureaus and have no direct influence on FICO. They can indirectly help you avoid missed payments (and thus protect your score), but they’re not input to the scoring model.
4. “their history of payments made to lenders” — the correct element
This is the only option among the four that FICO uses directly. Payment history is captured on credit reports and feeds into the FICO scoring algorithm.
Real case studies and estimated point impacts (illustrative)
To give readers a sense for how behavior maps to score changes, here are three illustrative case studies (anonymized and simplified). Keep in mind these are educational estimates — actual outcomes vary.
Case study 1 — Missed a payment (middle-range score)
Profile: Alex, starting FICO ~650, credit cards with low balances, reliable income.
Event: Missed a credit card payment by 35 days.
Estimated effect: Score dips by ~60–100 points depending on other factors. Recovery: bring account current, pay down balances, and avoid further missed payments — gradual recovery over 6–18 months.
Case study 2 — High utilization but no delinquencies (good score)
Profile: Priya, starting FICO ~760, a few credit cards but a temporary large balance due to travel.
Event: Credit utilization rises from 8% to 72% for a billing cycle.
Estimated effect: Score may drop 20–70 points. Recovery: pay down balances to <30% (or ideally <10%), and the score frequently rebounds within a billing cycle or two after reporting.
Case study 3 — Rebuilding after derogatory marks (low score)
Profile: Jordan, starting FICO ~520, has a 2-year-old charge-off and a past collection.
Action: Resolves some collections, starts a secured card, makes on-time payments for 18 months, reduces utilization.
Estimated effect: Score can rise 80–200+ points over 12–24 months, depending on severity and how many negative items age off the report.
These examples show two truths: (1) late payments and public records are heavy negatives; (2) utilization and consistency are powerful levers for recovery.
How to improve your FICO score — a 20-step tactical plan
This plan is actionable, ordered by impact and relative ease. Follow the steps most relevant to your situation.
- Get your credit reports from the three bureaus (Equifax, Experian, TransUnion) and review everything carefully.
- Look for errors (incorrect late payments, fraudulent accounts, wrong balances). Dispute anything inaccurate immediately.
- Bring past-due accounts current if possible. Current status matters more than old delinquencies for many lenders.
- Pay down high credit-card balances — prioritize the cards with the highest utilization ratio.
- Target utilization under 30% overall and under 10% for faster gains.
- Set up autopay for at least the minimum payment to avoid accidental late payments.
- Ask for higher credit limits on cards that you use responsibly — this can lower utilization instantly (don’t increase balances).
- Avoid closing old accounts — they contribute to average account age and available credit.
- Limit new applications for new credit; each hard inquiry can slightly reduce your score temporarily.
- Consider a secured card or credit-builder loan if you have thin or damaged credit — use responsibly and pay on time.
- Negotiate with collectors — sometimes you can settle for less; ask for written confirmation and a “pay-for-delete” if possible.
- Keep a cushion in your bank account so emergencies don’t cause missed payments — savings don’t change your FICO directly, but they prevent problems.
- Use tools that report positive rent/utilities where available (some services can add rental payments to your credit file).
- Diversify credit sensibly — having both revolving and installment credit can help your credit mix, but only take new credit if it’s necessary.
- Monitor scores and reports regularly so new errors or identity theft show up quickly.
- If you’re close to a milestone loan, time your applications — heavy rate-shopping for mortgages and auto loans is usually treated as a single inquiry within a short window by scoring models.
- Maintain repayment history — even a single late payment can be expensive in points lost.
- Educate family members — avoid joint accounts or co-signing unless you understand the risks (their behavior affects your score).
- Be patient and persistent — good habits compound and negative marks fade over time.
- Consult a credit counselor for complex situations (bankruptcy, significant medical debt) to get a tailored roadmap.
Fastest levers: fix report errors, pay down the largest balances, and make all payments on time. Those three often yield the quickest visible improvements.
Monitoring, disputes, and protecting your profile
Monitoring is preventive maintenance. Good monitoring helps you spot identity theft or reporting errors early.
Where to monitor
- AnnualCreditReport.com — free annual reports from the three bureaus (U.S.).
- Free monitoring services or paid identity-theft protection — useful but optional.
- Lender portals and statements — check that every reported balance and status matches your records.
How to dispute
When you find an error, dispute with the bureau that lists it and with the lender who reported it. Provide documentation (bank statements, payment receipts, letters). The bureau must investigate, typically within 30–45 days, and update the report if the dispute is resolved in your favor.
Keep copies of dispute correspondence and follow up — disputes sometimes require persistence.
FICO vs. other scoring models (VantageScore and lender models)
FICO is the most common scoring model, but it’s not the only one. VantageScore (created by the three major bureaus) is another popular model. Key similarities and differences:
- Both emphasize payment history and utilization as top factors.
- They differ in how they treat thin files, the age of old derogatory marks, and how they weight certain behaviors.
- Lenders may use customized versions of FICO (industry-specific models) when they evaluate mortgage, auto, or credit-card applicants.
Practical tip: When preparing for a major loan (mortgage, auto), ask the lender which scoring model and bureau they will use so you can target improvements accordingly.
Extended FAQ — covers many long-tail queries
Q: which of the following is part of the formula that determines a person’s FICO score? the percent of income that they invest into mutual funds their income level during a one year period the dollar amount in their savings funds their history of payments made to lenders
A: Their history of payments made to lenders. Payment history is reported to credit bureaus and used by FICO; the other listed items are not part of the FICO formula.
Q: Does my salary affect my FICO score?
No. Salary is used by lenders to assess affordability when underwriting a loan, but it is not an input to the FICO algorithm.
Q: Will having large savings increase my score?
No direct effect. However, savings reduce your chance of missing payments, which indirectly protects your score.
Q: Can investments like mutual funds help my credit?
Not directly. Investments are not reported to credit bureaus and therefore don’t influence FICO. They can, however, be an alternative way to build financial resilience.
Q: Does paying rent or utilities help my FICO?
Generally, rent and utility payments are not automatically included in credit reports. Some services can report these payments and may help build credit; check local options and whether the reporting service is recognized by major bureaus.
Q: How long do late payments stay on my credit report?
Typically up to 7 years. The negative impact lessens over time as you build positive payment history.
Q: Which behavior improves score fastest?
Paying down credit card balances (reducing utilization) and fixing report errors are among the fastest ways to see score improvement within a billing cycle or two. However, maintaining on-time payments is the most sustainable approach.
Q: Does checking my own credit hurt my score?
No. Personal checks are soft inquiries and do not impact scores. Hard inquiries by lenders can cause small, temporary drops.
Conclusion — succinct recap
To answer the long keyword precisely: which of the following is part of the formula that determines a person’s FICO score? the percent of income that they invest into mutual funds their income level during a one year period the dollar amount in their savings funds their history of payments made to lenders — the correct option is their history of payments made to lenders. Payment history is the most influential single factor in the FICO scoring model, accounting for roughly 35% of your score.