Your credit score is a three-digit number that summarizes how reliably you’ve repaid borrowed money. Lenders use it to decide whether to approve a loan or credit card application — and what interest rate to charge. Landlords check it before renting to you. Some employers review it before hiring. The score is not a judgment of your worth; it’s a statistical prediction of how likely you are to miss a payment. Here’s what goes into it, what the ranges mean, and what actually moves the number.
What a credit score is — and what it isn’t
The most widely used credit score is the FICO® Score, which ranges from 300 to 850. VantageScore is another common model; it uses the same range. Both pull from the same underlying source: your credit reports at the three major bureaus — Equifax, Experian, and TransUnion.
Your score is not stored anywhere permanently. It’s calculated fresh each time a lender requests it, based on whatever is in your credit report at that moment. This means your score can change month to month as your balances, payment history, and account ages shift.
You don’t have one credit score — you have many. Each bureau may have slightly different information, and lenders can use different scoring models depending on what type of credit you’re applying for (mortgage, auto loan, credit card). What matters practically is understanding the factors that all of these models weight similarly.
The five factors that build your score
1. Payment history — about 35% of your score
Whether you pay on time is the single biggest factor in FICO scoring. A payment that is 30 or more days late can significantly lower your score and stays on your report for seven years. The impact fades over time, but a recent missed payment does more damage than an old one.
Paying on time — even just the minimum — keeps this factor clean. Setting up autopay for at least the minimum payment protects against the most damaging type of credit event.
2. Credit utilization — about 30% of your score
Utilization is the percentage of your available revolving credit that you’re currently using. If your credit card limit is $5,000 and your balance is $1,500, your utilization on that card is 30%.
Most guidance suggests keeping utilization below 30% across all cards. Lower is generally better — people with the highest scores typically use less than 10% of their available credit. This factor is calculated fresh each month when your statement closes and your balance is reported, so paying down a card has an immediate effect on your score.
3. Length of credit history — about 15% of your score
The longer your accounts have been open, the better. Scoring models look at the age of your oldest account, the age of your newest account, and the average age of all accounts. This is why closing an old credit card — even one you don’t use — can lower your score. It removes age from the calculation and raises your average utilization if the card had a high limit.
4. Credit mix — about 10% of your score
Having different types of credit accounts — a credit card, an auto loan, a mortgage — demonstrates that you can manage various forms of borrowing responsibly. This factor is minor and not worth opening an account you don’t need just to improve it. It matters more at the margins when other factors are already strong.
5. New credit — about 10% of your score
Applying for new credit causes a hard inquiry on your report. A single inquiry typically drops your score by a few points and stays on your report for two years (though the score impact fades after about one year). Multiple applications in a short window can signal financial stress to lenders. The exception: rate shopping for a mortgage or auto loan. FICO typically counts multiple inquiries for the same loan type within a short window (14–45 days depending on the version) as a single inquiry.
What credit score ranges mean
FICO score ranges and what they generally mean for borrowers:
- 800–850 (Exceptional): Best available rates on nearly all loan products. Rarely denied for credit.
- 740–799 (Very Good): Strong rates on most products. Minor differences from exceptional tier.
- 670–739 (Good): Approved for most credit products. Rates competitive but not the absolute lowest.
- 580–669 (Fair): May be approved but at higher rates. Some lenders may decline.
- Below 580 (Poor): Most traditional lenders will decline. Limited to secured cards, credit-builder loans, or cosigned credit.
The cutoff that matters most depends on the loan type. For a conventional mortgage, most lenders want 620 or higher; the best rates typically require 740+. For credit cards, “good” tier is usually sufficient for approval, though not for the best reward card offers.
What doesn’t affect your score
Several things that might seem relevant have no direct effect on your FICO or VantageScore:
- Income or employment status
- Checking your own credit report or score (a soft inquiry — doesn’t affect your score)
- Age, race, religion, marital status, or national origin
- Rent payments (unless reported through a rent-reporting service)
- Bank account balances or overdrafts
- Medical debt under $500 (as of 2023, excluded from most major scoring models)
Rent and utility payments are not automatically in your credit report. Some landlords report through services, and some credit card issuers now offer to add rent payments to your report. If these are major expenses you pay reliably, it may be worth exploring whether a reporting service makes sense.
How to check your credit score and report
Your credit report — the detailed history of accounts, balances, and payments — is free at AnnualCreditReport.com. You can get a free report from each of the three bureaus. Checking your own report does not affect your score.
Your credit score is available for free through many sources: your bank or credit card issuer often provides it, and services like Credit Karma show VantageScores from two of the three bureaus. These give you a reasonable picture of where your score stands, though the exact number a specific lender sees may differ.
Errors on credit reports are more common than most people expect. A 2021 FTC study found that about one in five consumers had an error on at least one of their reports. Check for accounts you don’t recognize, incorrect balances, payments marked late that were on time, and accounts that should have aged off (most negative items fall off after seven years; bankruptcies after ten).
What moves your score most
If your score is lower than you’d like, the factors with the highest leverage are almost always the same:
- Pay on time, every month. Even one missed payment does damage that takes time to fade. Autopay on the minimum eliminates the risk.
- Pay down revolving balances. Getting utilization below 30% — or below 10% if possible — has an immediate effect once balances are reported.
- Don’t close old accounts. Even cards you rarely use add to your average account age and available credit.
- Don’t apply for multiple cards quickly. Space out applications, especially before a major purchase like a car or home.
- Be patient. A thin credit file or a recent negative mark takes time to recover. Six to twelve months of clean behavior shows up.
Building credit from scratch
If you have little or no credit history, a few options create a record without requiring existing credit:
- Secured credit card: You deposit money as collateral (the deposit becomes your credit limit). Use it for small purchases and pay in full each month. After six to twelve months of on-time payments, many issuers upgrade to a standard card and refund the deposit.
- Credit-builder loan: Offered by many credit unions and online banks. You make payments into a savings account; the money is released to you at the end. The payments build a credit history as you go.
- Authorized user status: A family member or trusted person adds you to their credit card account. Their account history may appear on your report, which can help if they have a strong record.
Starting with a secured card and paying it in full each month is the most straightforward path. Within a year, you typically have enough history to qualify for standard credit products.
Further Reading
- How to Read a Credit Card Statement
- APR Explained: How Credit Card Interest Works
- Credit Cards: Advantages and Disadvantages
This article is for general educational purposes only and does not constitute financial or legal advice. Credit scoring models vary and change over time. Check your credit reports regularly at AnnualCreditReport.com for your actual history.