CreditBeginner 5 min read
What actually affects your credit score
Five factors, ranked by weight, and what to do about each one.
- Payment history (~35%) — whether you pay on time. The single biggest factor.
- Amounts owed / utilization (~30%) — how much of your available credit you're using.
- Length of credit history (~15%) — the age of your accounts.
- Credit mix (~10%) — cards, loans, and other account types.
- New credit (~10%) — recent applications and hard inquiries.
The fastest lever: utilization
Utilization is your balance divided by your limit. Under 30% is the common guideline; under 10% is better. Paying a card down before the statement closes can move your score within one cycle.
Things that don't hurt your score
- Checking your own credit report (that's a soft inquiry).
- Your income, savings balance, or debit card use.
- Carrying a balance — you do not need debt to build credit.
Free reports
In the US you can pull your reports from all three bureaus at AnnualCreditReport.com. Check for accounts you don't recognize and dispute errors in writing.
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