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What Factors Determine Your Credit Score?

There are five factors that contribute to healthy credit scores.

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Unpacking your credit score can feel overwhelming, but it’s an important topic to understand. Lenders use your credit score to determine how responsible you are as a borrower. This three-digit number determines the interest rates and other terms you’re dealt when applying for credit products like credit cards, mortgages or personal loans. And it may even be used to qualify you for an apartment or car loan.

Knowing which factors make up your credit score can help you make better financial decisions to help grow your credit score. Here’s what you should know about credit scores and how they’re calculated.

What is a credit score?

Your credit score is how lenders measure your creditworthiness to determine how likely you are to pay back a debt. The higher your credit score, typically the more favorable your loan terms will be. That can translate to smaller monthly payments, lower interest rates and higher credit limits. 

So what’s a good credit score? There are two primary scoring models, VantageScore and FICO. Each has different credit score ranges, according to credit bureau Experian:

Poor: 300 to 579Very Poor: 300 to 499
Fair: 580 to 669Poor: 500 to 600
Good: 670 to 739Fair: 601 to 660
Very good: 740 to 799Good: 661 to 780
Exceptional: 800 to 850Excellent: 781 to 850

Approximately 90% of lenders utilize FICO scores over VantagesScores. 

What factors determine your FICO score?

Your FICO score is made up of five categories:

Payment history – 35%

Your payment history accounts for 35% of your score, which makes it the most important aspect of your credit score. Your payment history is made up of the monthly payments you make for your credit products. Paying on time will have a positive impact on your score. However, if you miss a payment or pay late, it could have numerous negative repercussions, including showing up on your credit report and dropping your score significantly. Missed payments could stay on your credit reports for up to seven years, so try not to miss one.

Building a positive history of on-time payments is a surefire way to improve your credit score. Just keep in mind it’ll take some time -- you likely won’t see any improvements for six months or more.

Amounts owed – 30%

Amounts owed, or credit utilization, makes up 30% of your score. It measures how much of your total available credit you’re using at once. For example, if you have a credit limit of $2,000, and you’re carrying a balance of $1,000, that means your credit utilization is 50%.

Experts recommend keeping your credit utilization at or below 30%. So if your credit line is $2,000, keep your balance under $600. The lower your credit utilization, the more you can grow your credit score.

Age of credit accounts – 15%

The length of time your credit accounts have been opened also impacts your credit score. It includes the age of your oldest account, your newest account and the average age of all of your credit accounts. It contributes 15% to your FICO score and is one of the reasons you should try to keep your credit accounts open for as long as possible.

Credit mix – 10%

A diversified credit portfolio will contribute 10% to your credit score. This factor looks at the different kinds of credit accounts on your credit reports, such as a mix of credit cards, mortgages, auto loans, personal loans and student loans. While a healthy mix of credit accounts that are managed responsibly can boost your FICO score, you don’t need to have one of every type of credit account to satisfy this category.

New credit – 10%

A new credit account can also have an impact on your score. This category counts for 10% of your FICO score -- but it doesn’t mean you should open a bunch of new accounts. Opening new credit accounts will typically result in a hard credit check on your credit report. A hard credit check will likely drop your credit score by a few times, but it’ll usually be temporary. But if you open a new account that diversifies your credit mix and significantly increases your credit limit, you may find your score increases.

How to check your credit score and report

If you’re not sure what your credit score is, there are a number of ways to check your credit score for free. Most credit card issuers -- including American Express, Capital One, Discover and Bank of America -- offer cardholders a way to do so via their online account page. 

Capital One also provides a credit score to CreditWise members, regardless of whether they have a Capital One credit card.

You can also request free credit reports from, Now through the end of 2023, you can receive a free weekly report from each credit bureau. You should also get in the habit of checking your credit reports for any discrepancies.

Each of the three major credit bureaus, Equifax, TransUnion and Experian, may offer free credit scores as well. Some offer FICO scores, while others offer VantageScores.

The bottom line

Your credit score is calculated based on your monthly credit payments, how much debt you have versus available credit, the age of your credit accounts, how diversified your credit portfolio is and your number of new credit accounts.

Correction: An earlier version of this article was assisted by an AI engine and it misconstrued some factors behind a credit score. Those points were corrected. This version has been substantially updated by a staff writer.

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Evan Zimmer has been writing about finance for years. After graduating with a journalism degree from SUNY Oswego, he wrote credit card content for Credit Card Insider (now Money Tips) before moving to ZDNET Finance to cover credit card, banking and blockchain news. He currently works with CNET Money to bring readers the most accurate and up-to-date financial information. Otherwise, you can find him reading, rock climbing, snowboarding and enjoying the outdoors.