Short answerA FICO score runs from 300 to 850 and is built from five things: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%) and credit mix (10%). Paying on time and keeping balances low do most of the work.
What the number is
A credit score is a guess about how likely you are to pay back what you borrow. Lenders use it to decide yes or no, and what rate to charge. Landlords and insurers sometimes look at credit too.
The most common scores run from 300 to 850. Higher is better. You don't have one score. You have several, because there are different scoring models and three credit bureaus.
The five ingredients
FICO publishes how its score is weighted.
- Payment history, 35%. Do you pay on time?
- Amounts owed, 30%. How much of your available credit are you using?
- Length of credit history, 15%. How old are your accounts?
- New credit, 10%. How many accounts have you applied for lately?
- Credit mix, 10%. Cards, car loans, student loans and so on.
What moves it most
Two things make up 65% of the score. Pay every bill on time, and keep card balances low compared with your limits. Autopay for at least the minimum protects the first one.
Time handles a lot of the rest. An old account in good standing helps, which is why closing your oldest card can backfire.
Myths worth dropping
Checking your own credit does not lower your score. That's a soft inquiry. Applying for new credit is a hard inquiry, and that can dip it a little for a while.
You also don't need to carry a balance and pay interest to build credit. Using a card and paying the statement in full each month reports as on-time payments.
You can pull your credit reports from all three bureaus for free at AnnualCreditReport.com. Read them. Mistakes happen, and you can dispute them.