What goes into your credit score
Your credit score is built from five categories of information that lenders report to the three major credit bureaus — Equifax, Experian, and TransUnion. The bureaus collect this data and use a formula (most commonly the FICO model) to turn it into a three-digit number between 300 and 850. The higher your score, the lower the risk you appear to lenders.
The five categories are not weighted equally. Payment history carries the most weight, followed by the amount of debt you currently owe. The length of your credit history, the mix of different types of credit you use, and new credit inquiries make up the rest. Understanding how each one works helps you see where you have the most control to improve your score.
Key Takeaways
- Payment history — whether you pay on time — accounts for 35% of your score and has the largest impact on the number lenders see.
- Credit utilization, or how much of your available credit you are currently using, accounts for 30% and can change month to month based on your balance.
- Length of credit history (15%), credit mix (10%), and new inquiries (10%) make up the remaining weight and change more slowly.
- Missing a payment by 30 days or more will damage your score, but the impact fades over time as the missed payment gets older.
- Closing a credit card can hurt your score even if you pay it off, because it reduces your total available credit and shortens your average account age.
Payment history: 35% of your score
Payment history is the single largest factor in your credit score. It measures whether you pay your bills on time — not whether you pay the full balance, but whether the payment arrives by the due date. This includes credit cards, car loans, mortgages, student loans, and any other account that reports to the bureaus.
One late payment can lower your score by 100 points or more, depending on how late it is and how good your score was before. A payment 30 days late damages your score more than a payment 10 days late. A payment 90 days late damages it more than one 30 days late. The damage is heaviest in the first few months after the late payment, then gradually fades — but a late payment can stay on your report for seven years.
If you have missed payments in your past, the best strategy is to make every payment on time from this point forward. Recent payment history matters more than old payment history, so a year of on-time payments will improve your score noticeably even if you had problems five years ago.
Credit utilization: 30% of your score
Credit utilization is the percentage of your available credit that you are currently using. If you have a credit card with a $5,000 limit and a $1,500 balance, your utilization on that card is 30%. If you have multiple cards, the bureaus look at your total utilization across all cards — if you have $20,000 in total limits and $6,000 in total balances, your overall utilization is 30%.
Lower utilization is better for your score. Most scoring models reward utilization below 30%, and the benefit continues to improve as you go lower. Using 10% of your available credit is better than using 30%, which is better than using 50%. This is one of the fastest factors to improve, because it changes every month as your balance changes — you do not have to wait for old accounts to age or old late payments to fall off your report.
Utilization does not depend on whether you carry a balance month to month. If you charge $2,000 to a card with a $5,000 limit and pay it off in full each month, your utilization will still be reported as 40% in the month you made the charge (because that is the balance the card issuer reported to the bureaus). Paying it off the next month will bring your utilization back down.
Length of credit history: 15% of your score
Length of credit history measures how long your credit accounts have been open. The bureaus look at the age of your oldest account, the age of your newest account, and the average age of all your accounts. A longer history is better, because it shows lenders you have managed credit over time.
This is the hardest factor to improve quickly, because accounts only get older with time. However, it is also the reason closing old credit cards can hurt your score — when you close an account, it stops aging and eventually falls off your report entirely. Keeping old accounts open, even if you do not use them, helps maintain a longer average account age.
If you are new to credit, this factor will naturally improve as you keep accounts open and active. If you are rebuilding credit after a period of inactivity, opening a new account (like a secured credit card) will lower your average account age temporarily, but the benefit of having active credit history usually outweighs that short-term damage.
Credit mix: 10% of your score
Credit mix is the variety of credit types you use. The bureaus distinguish between revolving credit (credit cards and lines of credit, where you can borrow, repay, and borrow again) and installment credit (car loans, mortgages, and personal loans, where you borrow a fixed amount and pay it back in fixed monthly payments). Having both types shows lenders you can manage different kinds of debt.
You do not need to take out a loan just to improve your credit mix. If you already have a credit card and a car loan, you have both types represented. This factor matters less than payment history or utilization, and it should never be the reason to open a new account or take on debt you do not need.
New credit inquiries: 10% of your score
When you explore for a credit card, car loan, or mortgage, the lender checks your credit report. This is called a hard inquiry and it appears on your report and affects your score. A single hard inquiry typically lowers your score by a few points, but the impact is small compared to payment history or utilization.
Hard inquiries stay on your report for two years, but they stop affecting your score after about three to six months. Multiple hard inquiries in a short time (like when you are shopping for a mortgage and multiple lenders pull your report) may be counted as a single inquiry if they happen within a certain window, usually 14 to 45 days depending on the scoring model.
Checking your own credit report or score does not create a hard inquiry — that is called a soft inquiry and does not affect your score. You can check your own credit as often as you want without any impact.
How these factors work together
Your credit score is not a straightforward average of these five categories. Instead, the scoring formula weighs them differently and looks at how they interact. For example, a single late payment hurts more if you also have high credit utilization, because both signal risk to lenders. Conversely, if you have a long history of on-time payments and low utilization, a single hard inquiry will have almost no effect on your score.
The best strategy is to focus on the factors you can control most easily: make every payment on time, keep your credit card balances low relative to your limits, and avoid opening new accounts unless you actually need them. These three actions account for 75% of your score and are within your direct control.
Frequently Asked Questions
Does paying off a credit card balance hurt my score?
Paying off a balance improves your score because it lowers your credit utilization. However, the improvement may not show up when ready — it depends on when your card issuer reports the payment to the bureaus, which is usually once a month on your statement date.
How much does a late payment hurt my score?
A single late payment can lower your score by 50 to 100 points or more, depending on how late it is and how good your score was before. A payment 30 days late causes more damage than one 10 days late. The damage is heaviest when ready after the late payment and gradually fades over time.
Should I close old credit cards I do not use?
Closing a card can hurt your score because it reduces your total available credit (raising your utilization) and lowers the average age of your accounts. If the card has no annual fee, keeping it open and unused is usually better for your score than closing it.
Can I improve my credit score in a month?
You can see improvement in one month by lowering your credit card balances, which directly lowers your utilization. However, major improvements (like recovering from a late payment or building a longer credit history) take several months to a year or more.
What is a good credit score?
Credit score ranges vary by lender, but generally 670 and above is considered good, 740 and above is very good, and 800 and above is excellent. Scores below 580 are considered poor. Your exact score matters less than understanding which of the five factors you can improve most quickly.