What Factors Affect Your Credit Score?

Your score comes from your credit report

A credit score is a number calculated from the information in one of your credit reports at the moment it's checked. The most widely used scores come from FICO and VantageScore, and their main versions range from 300 to 850. Higher scores tell lenders you're statistically less likely to fall behind on payments.

You don't have just one score. There are many versions, and each can be calculated from your Equifax, Experian, or TransUnion report. That's why the score on one app can differ from the one a lender sees.

The five main factors

FICO publishes how much each category generally matters for most people. VantageScore weighs similar factors in its own way. These percentages are general guides: how much each factor counts for you depends on what's in your reports.

1. Payment history (about 35%)

Whether you pay on time is the single biggest factor. Late payments, collections, charge-offs, and bankruptcies all fall here. Three things shape how much a problem counts:

• How late: 90 days late counts more than 30.
• How recent: last year counts more than five years ago.
• How often: one late payment counts less than a pattern.

Lenders generally don't report a payment as late to the credit bureaus until it's at least 30 days past due. If you miss a due date by a few days, you may owe a late fee, but paying right away can keep it off your reports.

What helps: paying every account on time, every month. Autopay for at least the minimum payment is a simple safeguard.

2. Amounts owed (about 30%)

This looks at how much you owe, especially your credit utilization: the share of your credit card limits you're using. High balances relative to your limits can lower scores, even if you pay on time. It also considers how much you still owe on loans compared with what you originally borrowed, and how many accounts carry a balance.

What helps: keeping card balances low, especially around your statement dates. See our guide to credit utilization.

3. Length of credit history (about 15%)

This includes the age of your oldest account, the average age of your accounts, and how long it's been since you used them. A longer history gives scoring models more to go on.

What helps: keeping older accounts open and in good standing, and being thoughtful about opening many new accounts at once, since each new account lowers your average age.

4. New credit (about 10%)

Opening several new accounts or applying for credit often in a short period can signal more risk. Each application for credit usually creates a hard inquiry. A single inquiry typically has a small effect, and FICO scores only count inquiries from the last 12 months.

Good to know: when you shop for a mortgage, auto loan, or student loan, scoring models generally treat multiple inquiries within a short window (often 14 to 45 days, depending on the model) as a single inquiry. Rate shopping within that window is expected. With FICO scores, that allowance applies only to these loan types, not credit cards. VantageScore treats all hard inquiries within 14 days as one, whatever the type of credit.

5. Credit mix (about 10%)

Having experience with different kinds of credit, like credit cards and installment loans, can help a little. It's not worth taking on a loan you don't need just to improve your mix.

Same score, different reasons

Two people can have the same score for completely different reasons:

• Person A has one card, opened eight months ago, always paid on time, with a low balance. Their score is held back mainly by a short history.
• Person B has several older accounts, but missed two payments last year and carries high card balances. Their score is held back by payment history and amounts owed.

The fix for each is different. Person A mostly needs time and continued on-time payments. Person B can start by bringing balances down and keeping every payment on time going forward.

This is why your score's key factors are worth reading. When you see a score from a lender or a credit monitoring app, it usually comes with a short list of the main reasons it isn't higher. If you're turned down for credit based on a score, the lender's notice will also list the main reasons.

Score ranges

Lenders set their own standards, but for common FICO scores, these ranges are often used as a rough guide:

• 800 and above: exceptional
• 740 to 799: very good
• 670 to 739: good
• 580 to 669: fair
• Below 580: poor

Crossing into a higher range can mean better rates or terms with some lenders, but no single number guarantees an approval.

Which score will a lender use?

It depends on the lender and the kind of credit:

• Credit cards and personal loans: often a general FICO or VantageScore version.
• Auto loans: many lenders use industry-specific scores, such as FICO Auto Scores, which range from 250 to 900.
• Mortgages: lenders have traditionally used older FICO versions, though the scores accepted for mortgages have been changing.

You usually can't choose. What you can control is what's in your reports, and that's what every model is built on.

If you don't have a score yet

If you have very little credit history, some scoring models can't produce a score at all. Common first steps include a secured credit card, a credit-builder loan from a bank or credit union, or becoming an authorized user on a trusted family member's card. Whatever you open, keep the balance low and pay on time.

What credit scores don't consider

Credit scores are based only on what's in your credit report. They don't consider:

• Your income, savings, or job (lenders may ask about these separately)
• Your age, race, religion, national origin, sex, or marital status
• Where you live
• Whether you've checked your own credit
• Your rent or utility payments, unless they're reported to the credit bureaus
• Debit card use or checking account history (unless you opt in to a score that uses bank data)

Common myths

• "Checking my score will lower it." No. Checking your own credit is a soft inquiry.
• "Carrying a balance builds credit." No. Paying in full every month avoids interest and still shows you're using the card.
• "Closing old cards helps." Usually not. It can raise your utilization and, over time, shorten your history.
• "Paying off a collection removes it." Not automatically. See how long negative information stays on a credit report.

Putting it together

If you're deciding where to focus, start with the two biggest factors:

1. Make every payment on time. Nothing else matters as much.
2. Keep card balances low relative to your limits.
3. Check your reports for errors. A score is only as accurate as the report behind it. Our list of common credit report errors shows what to look for.

Then let time do its part. Your history gets longer, older negative items carry less weight, and steady habits show up in your reports month after month.

You can do everything in this guide yourself, for free. If you'd like help understanding what's shaping your scores, AxleCredit offers credit report reviews and plain-language guidance in English and Spanish.