Credit Basics

Understanding What's Affecting Your Credit Report

The five main factors that shape a credit score and how each one is weighted by FICO and VantageScore.

Your credit score isn't random. It's a calculation based on your credit report, and understanding the factors gives you leverage to improve them.

Payment history (about 35%) Whether you pay on time is the single largest input. A 30-day late payment can stay on the report for up to seven years, though its impact fades over time.

Amounts owed / utilization (about 30%) This includes both total debt and the ratio of revolving balances to limits. Installment loans (auto, mortgage, student) are weighted differently than credit cards.

Length of credit history (about 15%) Average age of accounts and age of the oldest account both matter. Closing an old card can shorten your average.

Credit mix (about 10%) A blend of revolving and installment accounts tends to score better than a single account type.

New credit / inquiries (about 10%) Hard inquiries and newly opened accounts have a short-term dampening effect.

VantageScore weights these categories slightly differently but the fundamentals are the same. Knowing where you stand on each is the first step toward a strategic plan.

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