What Actually Affects Your Credit Score: The 5 Factors, Ranked by Impact

A good credit score can save you tens of thousands of dollars over a lifetime through lower mortgage, auto, and card rates. A bad one can cost you an apartment. Yet most people have only a vague idea of what moves the number.

The exact formulas are proprietary. But FICO, the company behind the scores most lenders use, publishes what goes into them and roughly how much each ingredient weighs. Below are the five factors, ranked by weight.

The five factors at a glance

Payment history and amounts owed together make up about 65% of the score.^[1] If you only have the energy to work on two habits, start with those.

1. Payment history (35%)

The most important thing a lender wants to know is whether you pay on time. Late payments, collections, and bankruptcies weigh heavily, and a late payment can stay on your credit reports for up to seven years from the original delinquency date.^[6]

The effect shows up in national data, too. When federal student loan delinquencies started appearing on credit reports again, the share of consumers with a 90-plus-day delinquency rose from 7.4% to 8.3%, and the average FICO Score dropped to 715.^[2] CNBC has since reported FICO’s latest average at 714.^[3]

2. Amounts owed (30%)

The biggest piece of this category is credit utilization: how much of your available revolving credit you’re using. A $3,000 balance on a $10,000 limit is 30% utilization.

Experian notes that utilization’s negative effect becomes more pronounced around 30%. People with FICO Scores of 800 or higher averaged just 7.1%, against a national average of 29%.^[4] Experian also suggests the best utilization is in the single digits.^[5]

Two details trip people up. First, utilization is measured both per card and overall, so one maxed-out card can hurt even when your total is low. Second, scoring uses the balance your card issuer reports, which is usually the statement balance, and it doesn’t matter whether you pay in full afterward. Someone who charges $4,000 a month and pays in full every time can still show high utilization. Your statement prints that closing date every cycle, alongside several other numbers worth knowing: how to read a credit card statement walks through the whole page.

LumaLedger

Credit cards

$20,000 limit across 2 cards

Sapphire Preferred··4721

$2,140

Utilization18%

of $12,000

Purchase APR

21.49%

Payment due

Sep 25

Freedom Unlimited··8802

$3,420

Utilization43%

of $8,000

Purchase APR

24.99%

Payment due

Oct 3

In the example above, overall utilization is $5,560 of $20,000, or about 28%, which is just under the 30% line. The Freedom card, though, sits at 43% on its own. Moving $1,000 of spending to the other card, or paying $1,000 before its statement closes, would bring it to 30% and overall utilization to 23%, and you wouldn’t have to spend a dollar less.

Store cards are a common way a balance lands on a limit too small to absorb it, because the card is opened at a register to finance one purchase. Whether the checkout discount is worth the account is a sum you can do before you sign: how long a store card discount survives the card’s interest rate depends almost entirely on the monthly payment. If that purchase came with a “no interest if paid in full” offer, the deadline matters as much as the balance: what a deferred interest promotion charges when you miss it is calculated from the purchase date, not from the amount left over.

Moving the balance rather than paying it down is the other lever, and it is priced. The average transfer fee among the largest issuers reached 4.3% of the amount moved, worth about four months of interest at today’s rates, so the saving depends entirely on how long the payoff would otherwise take.

The denominator can move without you, too. Issuers can lower a limit on their own, and the same balance on a smaller limit is a higher percentage overnight: what an issuer owes you after a credit limit decrease, and the payment that undoes it works through the notices and the arithmetic.

3. Length of credit history (15%)

Scores consider how long your accounts have been open (the oldest, the newest, and the average) and how recently they’ve been used.^[1] That’s why closing your oldest card to “clean up” can backfire. If an old no-fee card is unused, consider keeping it open with a small recurring charge on autopay. An account closed in good standing can remain on your report for up to ten years.^[6] The bigger cost of a closure usually lands on utilization rather than on age, and it lands the same month: what closing a card does to your score works the arithmetic through.

4–5. New credit and credit mix (10% each)

New credit looks at recent applications and newly opened accounts. Several applications in a short window can signal risk, though scoring models generally treat rate-shopping for a single mortgage or auto loan within a short period more leniently.

Credit mix considers whether you have experience with different types of credit, such as cards and installment loans. It’s one of the smallest factors, so it never makes sense to take on a loan just to improve your mix.

What doesn’t affect your score

• Checking your own credit. It’s a soft inquiry.
• Your income, savings, or checking balance. They aren’t part of your credit report (lenders may ask separately).
• Using a budgeting or net worth app. Linking accounts to a read-only tool doesn’t create a credit inquiry.
• Paying interest. Carrying a balance doesn’t help your score. It just costs you money.

Check for errors

Your score is only as accurate as your credit reports, and those aren’t always right. In a Federal Trade Commission study of nearly 3,000 reports, 1 in 5 consumers found an error on at least one of their three reports, and about 5% had errors serious enough to potentially lead to worse loan terms.^[7]

Credit reporting is also, by far, the most-complained-about category at the Consumer Financial Protection Bureau: more than 5.8 million of the 6.6 million complaints it received in 2025. The CFPB attributes much of that volume to credit-repair companies and others misusing the complaint process, so treat it as a sign of friction rather than a count of real errors.^[8]

Pull your free reports from all three bureaus at AnnualCreditReport.com, the official site. Look for accounts you don’t recognize, incorrect late payments, wrong balances or limits, and duplicate accounts. If something is wrong, dispute it directly with the bureau. If what you find is an account you never opened, the next step is choosing between a credit freeze and a fraud alert, which work very differently.

A 30-day credit score plan

1. 1
   Day 1: Set autopay on every account

   At least the minimum, on every card and loan. This protects your 35% factor permanently.
2. 2
   Day 2: Pull all three credit reports

   Dispute errors with the bureau that reports them. Keep screenshots and confirmation numbers.
3. 3
   Day 3: Find your utilization, per card and overall

   Divide each balance by its limit. Flag any card at 30% or above.
4. 4
   Day 4: Note every statement closing date

   Plan a payment a few days before each one, so the reported balance is low.
5. 5
   Day 30: Check the result

   Utilization changes typically show up once the new balances are reported. Keep going, and don’t close old accounts.

Most of this plan comes down to visibility: knowing balances, limits, and due dates across every card at once. LumaLedger’s Credit cards page puts that in one place, with live balances, utilization for each card (anything at 30% or more is flagged), purchase APRs, and payment due dates. It can also notify you when utilization runs high or a payment is coming due.

A great score is mostly the side effect of a steady financial routine. If you want to build one, try our monthly money review, where checking utilization is step four.