What Affects Your Credit Scores?

Do you feel like you need an advanced degree to figure out what is affecting your credit score? Good news is you don't—it can actually be rather simple.

Behind the number itself (credit scores typically range from 300 to 850), there are five main factors used to calculate credit scores. Lenders use those scores to figure out how likely you are to pay back your debt—thus those scores are often the deciding factor in whether you will get a new loan.

As your financial profile changes, so does your score, so knowing what factors and types of accounts affect your credit score gives you the opportunity to improve it over time.

Top 5 Credit Score Factors

While the exact criteria used by each scoring model varies, here are the most common factors that affect your credit scores.

Payment history. Payment history is the most important ingredient in credit scoring, and even one missed payment can have a negative impact on your score. Lenders want to be sure that you will pay back your debt, and on time, when they are considering you for new credit. Payment history accounts for 35% of your FICO^® Score^☉ , the credit score used by 90% of top lenders.
Amounts owed. Your credit usage, particularly as represented by your credit utilization ratio, is the next most important factor in your credit scores. Your credit utilization ratio is calculated by dividing the total revolving credit you are currently using by the total of all your revolving credit limits. This ratio looks at how much of your available credit you're utilizing and can give a snapshot of how reliant you are on non-cash funds. Using more than 30% of your available credit is a negative to creditors. Credit utilization accounts for 30% of your FICO^® Score.
Credit history length. How long you've held credit accounts makes up 15% of your FICO^® Score. This includes the age of your oldest credit account, the age of your newest credit account and the average age of all your accounts. Generally, the longer your credit history, the higher your credit scores.
Credit mix. People with top credit scores often carry a diverse portfolio of credit accounts, which might include a car loan, credit card, student loan, mortgage or other credit products. Credit scoring models consider the types of accounts and how many of each you have as an indication of how well you manage a wide range of credit products. Credit mix accounts for 10% of your FICO^® Score.
New credit. The number of credit accounts you've recently opened, as well as the number of hard inquiries lenders make when you apply for credit, accounts for 10% of your FICO^® Score. Too many accounts or inquiries can indicate increased risk, and as such can hurt your credit score.

Types of Accounts That Impact Credit Scores

Typically, credit files contain information about two types of debt: installment loans and revolving credit. Because revolving and installment accounts keep a record of your debt and payment history, they are important for calculating your credit scores.

Installment credit usually comprises loans where you borrow a fixed amount and agree to make a monthly payment toward the overall balance until the loan is paid off. Student loans, personal loans, and mortgages are examples of installment accounts.
Revolving credit is typically associated with credit cards but can also include some types of home equity loans. With revolving credit accounts, you have a credit limit and make at least minimum monthly payments according to how much credit you use. Revolving credit can fluctuate and doesn't typically have a fixed term.

How Does Having Different Accounts Affect My Credit Score?

Credit mix—or the diversity of your credit accounts—is one of the most common factors used to calculate your credit scores. It is also one of the most overlooked by consumers. Maintaining different types of credit accounts, such as a mortgage, personal loan and credit card, shows lenders you can manage different types of debt at the same time. It also helps them get a clearer image of your finances and ability to pay back debt.

While having a less diverse credit portfolio won't necessarily cause your scores to go down, the more types of credit you have—as long as you make on-time payments—the better. Credit mix accounts for 10% of your FICO^® Score and could be an influential factor in helping you achieve a top score.

Can Service Accounts Impact My Credit Score?

Service accounts, such as utility and phone bills, are not automatically included in your credit file. Historically, the only way a utility account could impact a credit score was if you didn't make payments and the account was referred to a collection agency.

But this is changing. A revolutionary new product called Experian Boost^®^ø now allows users to get credit for on-time payments made on utility and telecom accounts.

Experian Boost works instantly, allowing users with eligible payment history see their FICO^® Score increase in a matter of minutes. Currently, it is the only way you can get credit for your utility and telecom payments.

Through the new platform, users can connect their bank accounts to identify utility and phone bills. After the user verifies the data and confirms they want it added to their credit file, they will receive an updated FICO^® Score instantly. Late utility and telecom payments do not affect your Boost score—but remember, if your account goes to collections due to nonpayment, that will stay on your credit report for seven years.

What Can Hurt Your Credit Scores

As we discussed above, certain core features of your credit file have a great impact on your credit score, either positively or negatively. The following common actions can hurt your credit score:

Missing payments. Payment history is one of the most important aspects of your FICO^® Score, and even one 30-day late payment or missed payment can have a negative impact.
Using too much available credit. High credit utilization can be a red flag to creditors that you're too dependent on credit. Credit utilization is calculated by dividing the total amount of revolving credit you are currently using by the total of all your credit limits. Lenders like to see credit utilization under 30%—under 10% is even better. This ratio accounts for 30% of your FICO^® Score.
Applying for a lot of credit in a short time. Each time a lender requests your credit reports for a lending decision, a hard inquiry is recorded in your credit file. These inquiries stay in your file for two years and can cause your score to go down slightly for a period of time. Lenders look at the number of hard inquiries to gauge how much new credit you are requesting. Too many inquiries in a short period of time can signal that you are in a dire financial situation or you are being denied new credit.
Defaulting on accounts. The types of negative account information that can show up on your credit report include foreclosure, bankruptcy, repossession, charge-offs, settled accounts. Each of these can severely hurt your credit for years, even up to a decade.

How to Improve Your Credit Score

Improving your credit score can be easy once you understand why your score is struggling. It may take time and effort, but developing responsible habits now can help you grow your score in the long run.

A good first step is to get a free copy of your credit report and score so you can understand what is in your credit file. Next, focus on what is bringing your score down and work toward improving these areas.

Here are some common steps you can take to increase your credit score.

Pay your bills on time. Because payment history is the most important factor in making up your credit score, paying all your bills on time every month is critical to improving your credit.
Pay down debt. Reducing your credit card balances is a great way to lower your credit utilization ratio, and can be one of the quickest ways to see a credit score boost.
Make any outstanding payments. If you have any payments that are past due, bringing them up to date may save your credit score from taking an even bigger hit. Late payment information in credit files include how late the payment was—30, 60 or 90 days past due—and the more time that has elapsed, the larger the impact on your scores.
Dispute inaccurate information on your report. Mistakes happen, and your scores could suffer because of inaccurate information in your credit file. Periodically monitor your credit reports to make sure no inaccurate information appears. If you find something that's out of place, initiate a dispute as soon as possible.
Limit new credit requests. Limiting the number of times you ask for new credit will reduce the number of hard inquiries in your credit file. Hard inquiries stay on your credit report for two years, though their impact on your scores fades over time.

What to Do if You Don't Have a Credit Score

If you want to establish and build your credit but don't have a credit score, these options will help you get going.

Get a secured credit card. A secured credit card can be used the same way as a conventional credit card. The only difference is that a security deposit—typically equal to your credit limit—is required when signing up for a secured card. This security deposit helps protect the credit issuer if you default and makes them more comfortable taking on riskier borrowers. Use the secured card to make small essential purchases and be sure to pay your bill in full and on time each month to help establish and build your credit. Click here to learn more about how secured cards work and here to browse Experian's secured card partners.
Become an authorized user. If you are close with someone who has a credit card, you could ask them to add you as an authorized user to jump-start your credit. In this scenario, you get your own card and are given spending privileges on the main cardholder's account. In many cases, credit card issuers report authorized users to the credit bureaus, which adds to your credit file. As long as the primary cardholder makes all their payments on time, you should benefit.

Want to instantly increase your credit score? Experian Boost^® helps by giving you credit for the utility and mobile phone bills you're already paying. Until now, those payments did not positively impact your scores.

This service is completely free and can boost your credit scores fast by using your own positive payment history. It can also help those with poor or limited credit situations. Other services such as credit repair may cost you up to thousands and only help remove inaccuracies from your credit report.

Learn More About What Affects Your Credit Score

What’s the Most Important Factor of Your Credit Score?
The most important factor of your FICO Score is your payment history, which makes up 35% of your score. Here’s what other factors matter.
What is a Credit Utilization Rate?
Your credit utilization rate, sometimes called your credit utilization ratio, is the amount of revolving credit you're currently using divided by the total amount of revolving credit you have...
How to Improve Your Payment History
Maintaining a clean payment history—or refurbishing a spotty one—can help you improve your credit scores and save you money.
How Does Length of Credit History Affect Your Credit?
The length of your credit history can directly impact your credit scores, and this scoring factor is often misunderstood.

How Good Is Your Credit Score?

300 credit score 301 credit score 302 credit score 303 credit score 304 credit score 305 credit score 306 credit score 307 credit score 308 credit score 309 credit score 310 credit score 311 credit score 312 credit score 313 credit score 314 credit score 315 credit score 316 credit score 317 credit score 318 credit score 319 credit score 320 credit score 321 credit score 322 credit score 323 credit score 324 credit score 325 credit score 326 credit score 327 credit score 328 credit score 329 credit score 330 credit score 331 credit score 332 credit score 333 credit score 334 credit score 335 credit score 336 credit score 337 credit score 338 credit score 339 credit score 340 credit score 341 credit score 342 credit score 343 credit score 344 credit score 345 credit score 346 credit score 347 credit score 348 credit score 349 credit score 350 credit score 351 credit score 352 credit score 353 credit score 354 credit score 355 credit score 356 credit score 357 credit score 358 credit score 359 credit score 360 credit score 361 credit score 362 credit score 363 credit score 364 credit score 365 credit score 366 credit score 367 credit score 368 credit score 369 credit score 370 credit score 371 credit score 372 credit score 373 credit score 374 credit score 375 credit score 376 credit score 377 credit score 378 credit score 379 credit score 380 credit score 381 credit score 382 credit score 383 credit score 384 credit score 385 credit score 386 credit score 387 credit score 388 credit score 389 credit score 390 credit score 391 credit score 392 credit score 393 credit score 394 credit score 395 credit score 396 credit score 397 credit score 398 credit score 399 credit score 400 credit score 401 credit score 402 credit score 403 credit score 404 credit score 405 credit score 406 credit score 407 credit score 408 credit score 409 credit score 410 credit score 411 credit score 412 credit score 413 credit score 414 credit score 415 credit score 416 credit score 417 credit score 418 credit score 419 credit score 420 credit score 421 credit score 422 credit score 423 credit score 424 credit score 425 credit score 426 credit score 427 credit score 428 credit score 429 credit score 430 credit score 431 credit score 432 credit score 433 credit score 434 credit score 435 credit score 436 credit score 437 credit score 438 credit score 439 credit score 440 credit score 441 credit score 442 credit score 443 credit score 444 credit score 445 credit score 446 credit score 447 credit score 448 credit score 449 credit score 450 credit score 451 credit score 452 credit score 453 credit score 454 credit score 455 credit score 456 credit score 457 credit score 458 credit score 459 credit score 460 credit score 461 credit score 462 credit score 463 credit score 464 credit score 465 credit score 466 credit score 467 credit score 468 credit score 469 credit score 470 credit score 471 credit score 472 credit score 473 credit score 474 credit score 475 credit score 476 credit score 477 credit score 478 credit score 479 credit score 480 credit score 481 credit score 482 credit score 483 credit score 484 credit score 485 credit score 486 credit score 487 credit score 488 credit score 489 credit score 490 credit score 491 credit score 492 credit score 493 credit score 494 credit score 495 credit score 496 credit score 497 credit score 498 credit score 499 credit score 500 credit score 501 credit score 502 credit score 503 credit score 504 credit score 505 credit score 506 credit score 507 credit score 508 credit score 509 credit score 510 credit score 511 credit score 512 credit score 513 credit score 514 credit score 515 credit score 516 credit score 517 credit score 518 credit score 519 credit score 520 credit score 521 credit score 522 credit score 523 credit score 524 credit score 525 credit score 526 credit score 527 credit score 528 credit score 529 credit score 530 credit score 531 credit score 532 credit score 533 credit score 534 credit score 535 credit score 536 credit score 537 credit score 538 credit score 539 credit score 540 credit score 541 credit score 542 credit score 543 credit score 544 credit score 545 credit score 546 credit score 547 credit score 548 credit score 549 credit score 550 credit score 551 credit score 552 credit score 553 credit score 554 credit score 555 credit score 556 credit score 557 credit score 558 credit score 559 credit score 560 credit score 561 credit score 562 credit score 563 credit score 564 credit score 565 credit score 566 credit score 567 credit score 568 credit score 569 credit score 570 credit score 571 credit score 572 credit score 573 credit score 574 credit score 575 credit score 576 credit score 577 credit score 578 credit score 579 credit score

580 credit score 581 credit score 582 credit score 583 credit score 584 credit score 585 credit score 586 credit score 587 credit score 588 credit score 589 credit score 590 credit score 591 credit score 592 credit score 593 credit score 594 credit score 595 credit score 596 credit score 597 credit score 598 credit score 599 credit score 600 credit score 601 credit score 602 credit score 603 credit score 604 credit score 605 credit score 606 credit score 607 credit score 608 credit score 609 credit score 610 credit score 611 credit score 612 credit score 613 credit score 614 credit score 615 credit score 616 credit score 617 credit score 618 credit score 619 credit score 620 credit score 621 credit score 622 credit score 623 credit score 624 credit score 625 credit score 626 credit score 627 credit score 628 credit score 629 credit score 630 credit score 631 credit score 632 credit score 633 credit score 634 credit score 635 credit score 636 credit score 637 credit score 638 credit score 639 credit score 640 credit score 641 credit score 642 credit score 643 credit score 644 credit score 645 credit score 646 credit score 647 credit score 648 credit score 649 credit score 650 credit score 651 credit score 652 credit score 653 credit score 654 credit score 655 credit score 656 credit score 657 credit score 658 credit score 659 credit score 660 credit score 661 credit score 662 credit score 663 credit score 664 credit score 665 credit score 666 credit score 667 credit score 668 credit score 669 credit score

670 credit score 671 credit score 672 credit score 673 credit score 674 credit score 675 credit score 676 credit score 677 credit score 678 credit score 679 credit score 680 credit score 681 credit score 682 credit score 683 credit score 684 credit score 685 credit score 686 credit score 687 credit score 688 credit score 689 credit score 690 credit score 691 credit score 692 credit score 693 credit score 694 credit score 695 credit score 696 credit score 697 credit score 698 credit score 699 credit score 700 credit score 701 credit score 702 credit score 703 credit score 704 credit score 705 credit score 706 credit score 707 credit score 708 credit score 709 credit score 710 credit score 711 credit score 712 credit score 713 credit score 714 credit score 715 credit score 716 credit score 717 credit score 718 credit score 719 credit score 720 credit score 721 credit score 722 credit score 723 credit score 724 credit score 725 credit score 726 credit score 727 credit score 728 credit score 729 credit score 730 credit score 731 credit score 732 credit score 733 credit score 734 credit score 735 credit score 736 credit score 737 credit score 738 credit score 739 credit score

740 credit score 741 credit score 742 credit score 743 credit score 744 credit score 745 credit score 746 credit score 747 credit score 748 credit score 749 credit score 750 credit score 751 credit score 752 credit score 753 credit score 754 credit score 755 credit score 756 credit score 757 credit score 758 credit score 759 credit score 760 credit score 761 credit score 762 credit score 763 credit score 764 credit score 765 credit score 766 credit score 767 credit score 768 credit score 769 credit score 770 credit score 771 credit score 772 credit score 773 credit score 774 credit score 775 credit score 776 credit score 777 credit score 778 credit score 779 credit score 780 credit score 781 credit score 782 credit score 783 credit score 784 credit score 785 credit score 786 credit score 787 credit score 788 credit score 789 credit score 790 credit score 791 credit score 792 credit score 793 credit score 794 credit score 795 credit score 796 credit score 797 credit score 798 credit score 799 credit score

What Affects Your Credit Scores?

Top 5 Credit Score Factors

Types of Accounts That Impact Credit Scores

How Does Having Different Accounts Affect My Credit Score?

Can Service Accounts Impact My Credit Score?

What Can Hurt Your Credit Scores

How to Improve Your Credit Score

What to Do if You Don't Have a Credit Score

Learn More About What Affects Your Credit Score

What Makes a Good Credit Score?

How Good Is Your Credit Score?

Related Articles:

6 Things to Do Before a Credit Check

What Is a Fair Credit Score?

What Is a FICO Bankcard Score 8?

How Does Reporting Rent to Credit Bureaus Help Your Credit?

What Is a Credit Counselor?

5 Ways to Make Your Own Luck With Money This St. Patrick’s Day

Resources

Latest Research

Latest Reviews

Credit support

Credit advice

Most popular

Credit reports

Credit scores

Improving credit

Establishing credit

Identity Theft support

Identity Theft Advice

Most popular

Identity theft and fraud

Cybersecurity

Privacy

Credit Card advice

Most popular

Balance transfer

Cash back

For bad credit

For fair credit

For students

APR

Rewards

New to credit

Loan advice

Most popular

Debt consolidation

Personal

Student

Auto advice

Most popular

Top 5 Credit Score Factors

Types of Accounts That Impact Credit Scores

How Does Having Different Accounts Affect My Credit Score?

Can Service Accounts Impact My Credit Score?

What Can Hurt Your Credit Scores

How to Improve Your Credit Score

What to Do if You Don't Have a Credit Score

Learn More About What Affects Your Credit Score

What Makes a Good Credit Score?

How Good Is Your Credit Score?

Related Articles:

6 Things to Do Before a Credit Check

What Is a Fair Credit Score?

What Is a FICO Bankcard Score 8?

How Does Reporting Rent to Credit Bureaus Help Your Credit?

What Is a Credit Counselor?

5 Ways to Make Your Own Luck With Money This St. Patrick’s Day

Resources

Latest Research

Latest Reviews