A three-digit number that follows you around every time you borrow money. Here's what actually goes into it, what moves it fastest, and which advice you've heard is outdated or just wrong.
Credit scoring isn't one universal number. Several models exist, but FICO Scores are the ones lenders use most, showing up in roughly 90% of U.S. lending decisions, so that's the model most people mean when they say "credit score." It runs from 300 to 850, and it's built from five pieces of your credit history, each weighted differently.
Payment history matters most of all. A single payment reported 30 or more days late can knock more points off a score than almost anything else here, and it typically stays on your credit report for years. Pay on time, every time, and this factor takes care of itself.
"Amounts owed" is the other big one, and it's mostly about credit utilization: how much of your available credit you're actually using, added up across all your cards. Say you have two credit cards with a combined $10,000 limit, and you're carrying $3,000 in balances between them; that's 30% utilization. Most guidance says to keep utilization under 30%, and under 10% is better still, since scoring models treat high utilization as a sign you might be overextended, whether or not that's actually true.
The other three factors carry less weight individually, but they're not nothing, so here's the rest, briefly:
How many accounts you've opened recently, how many hard inquiries show up, and how long it's been since your most recent account. Inquiries stay on your report two years, but only the last 12 months count toward your score, and one inquiry's impact is usually small. The real red flag is several new accounts in a short window, especially with a thin credit history, since it drags down your average account age too.
The variety of credit you've handled: revolving accounts like credit cards, and installment loans like auto loans, student loans, mortgages, and personal loans. You don't need one of every type sitting open; this factor rewards showing you can manage different kinds of credit responsibly, not collecting account types for their own sake.
Three numbers: the age of your oldest account, the age of your newest account, and the average age across all of them. A longer history helps, but it's only one factor out of five, so it's not required for a good score, and it's the one factor that fixes itself automatically just by keeping accounts open and waiting.
So that's what goes into the number itself. Here's what the number actually means once you have it:
This is one of the most common myths out there, and it's backwards. Paying your card off in full every month is what actually helps your score; carrying a balance just adds interest with zero score benefit. Say you carry a $500 balance at 24% APR instead of paying it off; that's roughly $120 in interest over a year, for nothing. What FICO rewards is low utilization and on-time payments, not unpaid balances.
Closing a card you're not using feels responsible, but it can backfire two ways: it removes that card's limit from your total available credit, which can spike your utilization overnight, and it can eventually lower the average age of your accounts. Say you have a maxed-out $2,000 card and an unused $8,000 card at $0; closing the second card takes your overall utilization from 20% to 100% instantly, even though you didn't spend a dime.
Checking your own credit report or score, through a bank app, a free credit site, or your official annual report, is a "soft" inquiry, and soft inquiries never affect your score, no matter how often you check. What does count is a "hard" inquiry, the kind that happens when you actually apply for new credit, and even that typically costs fewer than 5 points.
There's no single number that follows you everywhere. FICO and VantageScore are different models with different math, each bureau (Experian, Equifax, TransUnion) can hold slightly different information, and even FICO has multiple versions in use depending on the lender and the loan type. The score a free app shows you and the score a mortgage lender pulls can easily land 20 or more points apart, and both can be "right."
The myths above cover the things people worry about that don't really matter. This list is the opposite: the negative marks that genuinely move a score, ranked from most damaging to least, and roughly how long each one sticks around.
The pattern worth noticing: the events that hurt the most are also the ones that require real financial distress to happen at all. Ordinary slip-ups, like a maxed-out card or a rate-shopping inquiry, sit at the bottom of the list for a reason.
Beyond the five main factors, a handful of specific rules explain a lot of what people find confusing about their score day to day.
That rate-shopping window matters if you're comparing offers for a mortgage, auto loan, or student loan: applying to several lenders for the same type of loan within a short window gets treated as one inquiry, not several, specifically so you can shop around without being penalized for it.
Strip away the myths and the score comes down to two habits that cover 65% of the math: pay everything on time, every time, and keep your balances low relative to your limits. Everything else, how long you've had credit, how many accounts you've opened lately, what mix of credit types you carry, still counts, but it can't outweigh a pattern of late payments or maxed-out cards. Build those two habits and the rest of the score tends to take care of itself over time.
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This page explains how credit scoring generally works; it isn't personalized financial advice, and exact formulas are proprietary and can change. Check your own credit reports and a qualified advisor for guidance specific to your situation.