In FICO scoring, what does the 'amounts owed' factor represent?

• A. Amounts owed reflects the balance owed as a percentage of total available credit.
• B. Amounts owed reflects the number of accounts.
• C. Amounts owed reflects payment history.
• D. Amounts owed reflects your credit score.

Answer: (A)

Amounts owed measures credit utilization—the portion of your available revolving credit you’re using right now. It looks at your current balances on cards and other revolving lines of credit and compares them to the limits on those accounts. The idea is to assess how much of your available credit you’re carrying as debt; lower utilization signals you’re not maxing out your borrowing, which looks safer to lenders and helps your FICO score. A good rule of thumb is to keep total utilization under 30%, and even better when possible under 10–20%. For example, if your total credit limit across all cards is $10,000 and you owe $2,000, your utilization is 20%.

This isn’t about how many accounts you have, nor is it a measure of your payment history, and it isn’t the score itself.