What actually moves your credit score
Your credit score is a number generated by an algorithm, and FICO publishes exactly what factors go into it and how much each one weighs. This is not a mystery. Most people optimize for the wrong things — closing cards, avoiding credit, obsessing over inquiries — while letting the big factors slide.
The five factors (FICO)
| Factor | Weight |
|---|---|
| Payment history | 35% |
| Amounts owed (utilization) | 30% |
| Length of credit history | 15% |
| Credit mix | 10% |
| New credit (inquiries) | 10% |
Payment history — 35%
One late payment can drop your score 50–100 points. This is the single most important factor. Pay every bill on time, every month. Set up autopay for the minimum on every account so you're never accidentally late.
Late payment impact by severity:
- 30 days late: the threshold to show on your report — significant damage
- 60 days late: worse
- 90+ days late: severe
- Collections: devastating, stays on report 7 years
A missed payment from two years ago still affects you, but its impact fades over time as you build positive history on top of it.
Credit utilization — 30%
Utilization is how much of your available credit you're using. If you have a $10,000 credit limit across all cards and you're carrying $3,000 in balances, your utilization is 30%.
General guidance:
- Under 30% is the widely-cited threshold
- Under 10% is better
- Under 5% is optimal for maximizing this factor
- 0% can slightly hurt (inactive credit) — carrying a small balance and paying it is better
Utilization is calculated both per-card and across all cards. A card maxed at $500 with a $500 limit is 100% utilization on that card even if your overall rate is fine — this matters.
The timing trick: Utilization is typically reported on your statement closing date, not your payment due date. If you pay your balance before the statement closes, your reported utilization is lower than your actual spending.
Length of credit history — 15%
Three sub-factors:
- Age of your oldest account
- Age of your newest account
- Average age of all accounts
This is why closing old credit cards is often bad advice. Closing your oldest card removes those years from your history and shortens your average account age. If you have an old card with no annual fee, keep it open and use it occasionally.
The implication for building credit: Start early and stay patient. A 25-year-old who opened a secured card at 18 has 7 years of history. You can't accelerate time.
Credit mix — 10%
Having different types of credit (revolving like credit cards, installment like auto loans or student loans, mortgage) shows you can manage various credit products. You don't need to take out loans you don't need to optimize this — it's 10% and it fills in naturally as you build credit.
New credit / inquiries — 10%
When you apply for new credit, the lender does a hard inquiry that temporarily reduces your score by a few points (typically 2–10). The effect fades within 12 months and falls off your report after 2 years.
Rate shopping exception: Multiple hard inquiries for the same type of loan (mortgage, auto) within a short window (14–45 days depending on the scoring model) count as a single inquiry. You can shop multiple lenders without multiplying the impact.
Soft inquiries (checking your own score, pre-approval checks, employer checks) do not affect your score.
What doesn't affect your score
- Your income
- Your employment status
- Your bank account balances
- Checking your own score
- Debit card usage
- Rent payments (unless reported through a service like Experian RentBureau — some landlords use these)
Common mistakes
Closing old cards: Shortens your history, increases utilization. Usually bad unless there's an annual fee.
Avoiding all credit: No credit history is not the same as good credit. You need accounts to build a score.
Carrying a balance to "build credit": False. You don't need to carry a balance and pay interest to build credit. Paying in full monthly builds the same payment history and keeps utilization low.
Obsessing over inquiries: A 5-point drop from a hard inquiry is noise compared to the impact of payment history and utilization.
Quick reference
- Never miss a payment — 35% of your score. Autopay minimums.
- Keep utilization under 10% — pay before the statement closes if you need to
- Don't close old accounts — history length matters
- Hard inquiries are minor — don't avoid credit applications out of fear of them
- Check your own score anytime — soft inquiry, no impact