How Credit Scores Are Calculated
The factors behind your score and which habits move it most.
A credit score is a number lenders use to estimate how likely you are to repay. Models differ by country, but they generally weigh your payment history, how much of your available credit you use, how long you’ve had credit, and how often you apply for more.
What goes into the score
In the widely used U.S. FICO model, payment history counts for about 35%, amounts owed about 30%, length of credit history about 15%, new credit about 10% and credit mix about 10%.
Other countries and models use different scales, but the same behaviors tend to matter.
The two habits that matter most
Pay on time, every time. Late payments are among the most damaging marks and can stay on your report for years.
Keep balances low compared with your limits. Using a small share of your available credit — often suggested as under 30% — signals that you aren’t stretched.
Things that matter less than people think
Checking your own score doesn’t hurt it. Income isn’t part of the score itself, though lenders look at it separately.
Closing old cards can lower your score by shortening your history and reducing your available credit.
Set up automatic minimum payments as a safety net, then pay the full balance manually. You’ll never miss a due date by accident.
Frequently asked questions
How long does it take to improve a score?
Lower balances can show up within a billing cycle or two. Recovering from late payments takes longer, as they age.
Do I need debt to have a good score?
You need some credit history, but not debt you pay interest on. A card paid in full each month builds history.
This guide explains a general concept; it isn’t a recommendation to buy, sell or borrow. For decisions about your own money, consider speaking with a licensed financial professional.
