What factors affect your credit score? (2024)

Your credit scores help sum up how risky it is to loan you money. If you want to apply for a new credit card, mortgage or any other type of loan, your credit scores will likely lay the foundation for whether you are approved or denied.

The most common credit scoring models are FICO and VantageScore. FICO scores have been around since 1989 — longer than VantageScores, which were developed by credit bureaus Experian, Equifax and TransUnion and launched in 2006.

Both VantageScore and FICO Score have multiple models, but the FICO Score 8 and the VantageScore 3.0 are the most relevant editions.

Each model has its nuances, but they all involve analyzing a range of data inputs about your financial history. Read on to learn what factors can affect your credit score, how often your score changes and what you can do to give it a boost.

We receive compensation from our partners for Featured Offer placements, which impacts how and where their offer is displayed.

Featured Offer

Welcome Bonus

$200 online cash rewards bonus after you make at least $1,000 in purchases in the first 90 days of account opening.


Regular APR

18.24% – 28.24% Variable APR on purchases and balance transfers

Annual Fee


Credit Score

Credit Score ranges are based on FICO® credit scoring. This is just one scoring method and a credit card issuer may use another method when considering your application. These are provided as guidelines only and approval is not guaranteed.

Excellent, Good

What factors affect your credit score? (1)

On Bank of America's Website

Factors that impact your credit score

You make decisions about money every day, and credit scores use some of these actions to predict your likelihood of making payments on time. What factors affect your credit score? Below, we’ll outline the five main influencers for any version of your FICO score. Your VantageScore is calculated with similar information.

Payment history (35%)

Before a lender can feel comfortable about letting you borrow money, they’re going to want to know whether you have paid other lenders back on time. Your payment history carries the biggest weight in both your FICO score (35%) and VantageScore 3.0 (40%). If you have a late payment that has haunted your credit report, it will disappear after seven years, and its effect can decrease with time.

Amounts owed (30%)

Lenders also want to get a sense of how much money you’re paying other lenders. But the amount you owe across all your credit cards and loans doesn’t tell the full story. Even more important is the percentage of available credit you’re using on credit cards and other revolving lines of credit. On a credit card, your available credit is your credit card limit. If you’re close to maxing out your credit cards, you have a very high credit utilization, which can signal that you’re stretching your finances thin. Broadly, using no more than 30% of your credit limit is a good idea.

Credit history length (15%)

How long each of your accounts has been open, and your accounts’ average age, also affects your credit score. FICO looks at information including the date you opened your oldest account, the date you opened your newest account and the average age across all your accounts. The lesson from this piece of the credit scoring puzzle is simple: It’s often wise to keep your oldest account open, even if you aren’t regularly using it anymore, since closing that card can affect your credit score.

New credit applications (10%)

When you submit an application for a new loan or line of credit, your score might drop by a few points. If you apply for several credit cards or loans in a row, you’re more likely to see damage. FICO is more lenient when consumers apply for multiple mortgages, auto loans or student loans to compare rates. In these cases, try to submit all your applications within the same 14 days to limit the effect on your credit score.

Credit mix (10%)

Your credit mix refers to the types of loans you have. Installment loans such as mortgages, car loans and student loans provide lump sums that you’ll typically repay with fixed payments. With revolving loans such as credit cards and home equity lines of credit, you’ll be granted a credit limit, such as $25,000. With this limit, you can borrow as much as $25,000 at a time (though you should aim to keep your credit utilization much lower than 100%). As you pay down your balance, you can borrow again. Lenders like to see that you can handle paying both installment loans and lines of credit.

Ways to improve your credit score

If you’re looking to improve your credit score, there is no one-size-fits-all strategy.

“It can vary by each consumer’s unique credit profile,” said Tom Quinn, vice president of strategic alliances at FICO, so consumers should check their credit reports and FICO scores to help them craft a strategy. “If an individual is looking to improve their credit score quickly, generally reducing their reported credit debt is the best option.”

Consider these key tips to improve your credit score:

  • Make every payment on time: Your payment history is the most important factor in your credit score. Set reminders in your calendar to make sure that your payments always arrive on or before the due date.
  • Aim to keep your credit utilization ratio low: The amount of outstanding debt on all your credit cards and other credit lines versus your combined credit limit is your total credit utilization. By leaving more credit available, you’ll typically help your credit score. You can also consider asking your issuer for a credit limit increase, which can bring down your credit utilization.
  • Avoid opening and closing accounts frequently: Carefully consider the pros and cons before opening or closing an account. Accounts that stay open longer and maintain good standing help your credit score.

How often credit scores change

Credit scores change when lenders submit new information to credit bureaus about your accounts. Credit card information is typically reported once a month to credit bureaus, Quinn said.

“If a consumer makes a sizable reduction in credit card balance,” Quinn said, “any associated impact on their score would surface when the issuer reports the updated information to the credit bureaus.”

Understanding credit score ranges

If you’re looking at your credit score and trying to figure out whether you have good credit, the answer may depend on the scoring model. Both FICO and VantageScore use ranges to group borrowers into different classifications.

FICO credit score ranges:

  • 800+: Exceptional
  • 740 to 799: Very good
  • 670 to 739: Good
  • 580 to 669: Fair
  • Lower than 580: Poor

VantageScore ranges:

  • 781 to 850: Excellent
  • 661 to 780: Good
  • 601 to 660: Fair
  • 500 to 600: Poor
  • 300 to 499: Very poor

While the ranges and terminology look a bit different between the two, the same principle applies across the board: The higher the number next to your name is, the better shape your credit is in.

Frequently asked questions (FAQs)

Your credit score may look different between the three major credit bureaus because one of your creditors may not report information to all three of them. You also may be seeing your FICO score with one bureau, and your VantageScore with another.

Typically, it takes at least 30 days to improve your credit score. Creditors don’t report changes to credit bureaus every day, so you will likely need to wait until a positive action such as paying off a credit card shows up on your report. If you are applying for a mortgage, you can consider an option called a rapid rescore that can help recalculate your score within three to five days.

No. Checking your own credit score is a soft inquiry, which does not have any impact. Whether you’re pulling your credit report or using a credit score monitoring system, keeping regular tabs on your credit health is a good habit.

If you declare bankruptcy, your credit score will suffer, though the effect will decrease over time. Bankruptcies will remain on your credit report for seven or 10 years.

What factors affect your credit score? (2024)


What harms your credit score? ›

Late or missed payments hurt your score. Amounts Owed or Credit Utilization reveals how deeply in debt you are and contributes to determining if you can handle what you owe. If you have high outstanding balances or are nearly "maxed out" on your credit cards, your credit score will be negatively affected.

What affects your credit score the least? ›

Paying with a debit card

Using a debit card, rather than a credit card, to pay for items typically won't impact your credit history or credit scores. When you pay with a credit card, you're essentially borrowing the funds to pay back later. With a debit card, you're using money you already have in an account.

Why is my credit score going down when I pay on time? ›

Using more of your credit card balance than usual — even if you pay on time — can reduce your score until a new, lower balance is reported the following month. Closed accounts and lower credit limits can also result in lower scores even if your payment behavior has not changed.

Does a 7 day late payment affect credit score? ›

When is a payment marked late on credit reports? A payment will typically need to be 30 days late before it's reported to the credit reporting bureaus. An overlooked bill won't hurt your credit as long as you pay before that 30-day mark, although you may have to pay a late fee.

What is considered a good credit score? ›

Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent.

Is a 900 credit score possible? ›

Highlights: While older models of credit scores used to go as high as 900, you can no longer achieve a 900 credit score. The highest score you can receive today is 850. Anything above 800 is considered an excellent credit score.

What 3 things can cause a low credit score? ›

Even one late payment can cause credit scores to drop. Carrying high balances may also impact credit scores. Closing a credit card account may impact your debt to credit utilization ratio.

Does opening bank accounts affect credit? ›

A checking account can affect your credit score positively if you sign up for an opt-in credit reporting program, or it can harm your score if you don't pay your overdrafts or fees. Otherwise, opening, closing or using your account typically won't affect your score either way.

Is 650 a bad credit score? ›

As someone with a 650 credit score, you are firmly in the “fair” territory of credit. You can usually qualify for financial products like a mortgage or car loan, but you will likely pay higher interest rates than someone with a better credit score. The "good" credit range starts at 690.

Why is my credit score so low when I have no debt? ›

Having no credit history can look like bad credit to lenders. It is hard to determine your creditworthiness with nothing to compare it to. Lenders consider the credit model mix when making credit decisions, and someone with no credit likely does not meet most of the requirements.

What credit score is too low for a job? ›

There is no minimum credit score for a job. Employers do not even have access to your score but some may check your credit history as part of the hiring process, especially if the job involves financial responsibilities or access to sensitive information.

What are all 6 of the credit factors and explain them? ›

Factors used to calculate your credit score include repayment history, types of loans, length of credit history, debt utilization, and whether you've applied for new accounts. A credit score plays a key role in a lender's decision to offer credit and for what terms.

What are the four cs of credit? ›

Character, capital, capacity, and collateral – purpose isn't tied entirely to any one of the four Cs of credit worthiness. If your business is lacking in one of the Cs, it doesn't mean it has a weak purpose, and vice versa.

What bills count towards credit score? ›

Some other monthly bills that, if paid on time and reported to the credit bureaus, could help you build credit include: Credit card payments, including secured credit cards and student credit cards. Installment loans like student loans and auto loans. Mortgages.

Top Articles
Latest Posts
Article information

Author: Errol Quitzon

Last Updated:

Views: 5742

Rating: 4.9 / 5 (59 voted)

Reviews: 90% of readers found this page helpful

Author information

Name: Errol Quitzon

Birthday: 1993-04-02

Address: 70604 Haley Lane, Port Weldonside, TN 99233-0942

Phone: +9665282866296

Job: Product Retail Agent

Hobby: Computer programming, Horseback riding, Hooping, Dance, Ice skating, Backpacking, Rafting

Introduction: My name is Errol Quitzon, I am a fair, cute, fancy, clean, attractive, sparkling, kind person who loves writing and wants to share my knowledge and understanding with you.