The 5 Factors That Make Up Your Credit Score
Your credit score isn't a mystery. It's calculated from five specific factors — and knowing each one tells you exactly where to focus.
1. Payment history (35%)
The single largest factor of your FICO score. Lenders want to know: do you pay on time? Even one 30-day late payment can drop your score significantly. Late payments stay on your report for seven years, but their impact fades over time. The fix is simple but non-negotiable: always pay at least the minimum by the due date, every month, without exception.
2. Credit utilization (30%)
How much of your available revolving credit are you using? This is calculated per card and across all cards combined. The lower, the better. Aim for under 30%, and ideally under 10% if you're trying to maximize your score. This factor updates monthly, making it one of the fastest to improve.
3. Length of credit history (15%)
This includes the age of your oldest account, your newest account, and the average age of all accounts. Older is better. This is why you should think carefully before closing old credit cards — even ones you don't use often. A long-dormant card with no annual fee is usually worth keeping open.
4. Credit mix (10%)
Having both revolving accounts (credit cards) and installment accounts (car loans, student loans, mortgages, personal loans) shows lenders you can manage different types of debt. You don't need to take on debt you don't need just to improve your mix — but if you're building from scratch, having one of each type does help.
5. New credit (10%)
Every time you apply for new credit, the lender does a hard inquiry on your report, which temporarily lowers your score by a few points. The impact is small and fades within a year. But opening several accounts in a short period is a red flag to lenders. See common credit mistakes for the full list of behaviors to avoid. Space out your applications and only apply for credit you actually need.
Common questions
- Which factor matters most for someone starting from zero?
- Payment history (35%) — but you can't build it without first opening an account. So the practical order is: open one account, set up autopay so payment history starts clean, then focus on keeping utilization low.
- Does VantageScore use the same five factors?
- Mostly — VantageScore uses slightly different weights and adds "available credit" as a separate factor, but the broad picture is the same. The actions that build a FICO score also build a VantageScore.
- How quickly does each factor change?
- Utilization updates monthly. Payment history updates monthly but a single missed payment lingers for seven years. Account age grows passively. Credit mix changes when you add a new type of account. New credit recovers within a year.
- What's a "good" credit mix?
- Having at least one revolving account (credit card) and one installment account (loan) covers the basics. You don't need to take on debt for the sake of the factor — it's only 10% of your score.
- Do hard inquiries really hurt my score?
- Yes, but minimally — typically 5 points per inquiry, recovering within 12 months. Multiple inquiries for the same product (auto loan, mortgage) within 14–45 days count as a single inquiry.
Key Takeaways
- Payment history (35%) is the most important — never miss a payment.
- Utilization (30%) is the fastest factor to change — pay down balances.
- Don't close old accounts — length of history matters.
- Credit mix and new credit are minor factors; don't over-optimize for them.
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