Your credit score comes from five measurable things in your credit report

Your credit score is a three-digit number built from data in your credit report — a record of how you have borrowed and repaid money. The three major credit bureaus (Equifax, Experian, and TransUnion) collect this data from lenders, creditors, and public records, then sell it to companies that calculate your score. The most common scoring model is FICO, which weighs five categories differently. Your score is not a judgment; it is a prediction. Lenders use it to estimate the risk of lending to you.

The five factors are payment history, amounts owed, length of credit history, credit mix, and new credit inquiries. No single factor determines your score — they work together. A missed payment hurts more than opening a new card, but both move the number. Understanding what each factor does helps you see why your score is what it is and what actually changes it.

Key Takeaways

  • Payment history makes up 35 percent of your FICO score, so a single missed payment can lower your score by dozens of points and stays on your report for seven years.
  • Amounts owed (your credit utilization) counts for 30 percent — using more than 30 percent of your available credit limit signals higher risk, even if you pay on time.
  • Length of credit history is 15 percent, which is why closing old accounts can hurt your score more than opening new ones.
  • Credit mix (having different types of credit like cards, loans, and mortgages) is 10 percent, and new credit inquiries are 10 percent — both matter less than the first three factors.
  • Your score updates monthly when creditors report to the bureaus, so changes take weeks to show, not days.

Payment history: 35 percent of your score

Payment history is the largest single factor because it directly shows whether you pay what you owe on time. This includes credit cards, car loans, mortgages, student loans, and any other debt that gets reported to the bureaus. One late payment (typically 30 days past due) can drop your score by 100 points or more, depending on how high it was before. Multiple late payments or accounts sent to collections do more damage.

A missed payment stays on your credit report for seven years from the date it first became late. After seven years, it falls off automatically — you do not have to do anything. Paying the debt does not remove it from your report, but it does stop the damage from growing. If you have missed payments, the older they are, the less they hurt your score. A missed payment from five years ago matters less than one from last month.

Bankruptcy also appears in payment history and stays for seven to ten years depending on the type. Chapter 7 bankruptcy stays for ten years; Chapter 13 stays for seven years.

Amounts owed: 30 percent of your score

Credit utilization is the percentage of your available credit that you are currently using. If you have a credit card with a $1,000 limit and a $300 balance, your utilization on that card is 30 percent. This factor counts for 30 percent of your FICO score.

Lenders see high utilization as a sign of financial strain. Using more than 30 percent of your available credit can lower your score, even if you pay your full balance every month. Using more than 50 percent hurts more. Maxing out a card (100 percent utilization) signals the highest risk. The math is straightforward: lower utilization means a higher score, all else equal.

Utilization is calculated both per card and across all your cards. If you have three cards with $1,000 limits each ($3,000 total) and $600 in balances spread across them, your overall utilization is 20 percent. This is better for your score than having $600 on one card and $0 on the other two, even though the total debt is the same. Paying down balances is the fastest way to improve this factor.

Length of credit history: 15 percent of your score

This factor measures how long you have had credit accounts open. It includes the age of your oldest account, the age of your newest account, and the average age of all your accounts. A longer history is better because it shows you have managed credit over time.

Closing old accounts can hurt this factor more than you might expect. When you close a card, it stops aging, and your average account age may drop. If the closed account had a zero balance, closing it also removes that zero from your utilization calculation, which can raise your overall utilization percentage and lower your score twice over. Keeping old accounts open (even unused) helps your score more than closing them.

If you are new to credit, you cannot do much about this factor except wait. Your score will naturally improve as your accounts age. If you have been denied credit because of a short history, that is a real limitation — no action changes it quickly.

Credit mix: 10 percent of your score

Credit mix means having different types of credit accounts. Credit cards are revolving credit (you can borrow, repay, and borrow again). Car loans, mortgages, and personal loans are installment credit (you borrow a fixed amount and repay it in set payments). Having both types shows you can manage different kinds of debt.

This factor counts for only 10 percent of your score, so it should not drive your decisions. Opening a car loan or mortgage just to improve your mix is not worth the cost. If you already have multiple types of credit, this factor is working in your favor. If you have only credit cards, having only credit cards will not destroy your score — the other four factors matter far more.

New credit inquiries: 10 percent of your score

When you explore for credit, the lender checks your credit report. This is called a hard inquiry and it appears on your report and lowers your score slightly — usually by five to ten points. Multiple hard inquiries in a short time (within 14 to 45 days, depending on the scoring model) often count as a single inquiry because the system recognizes you are shopping for one loan, not explore recklessly.

A soft inquiry (when you check your own credit, or when a company pre-screens you for an offer) does not affect your score. Only hard inquiries do. Hard inquiries stay on your report for two years but stop affecting your score after about three to six months. If you are rate-shopping for a mortgage or car loan, explore within a short window so the inquiries count as one.

Opening new accounts also affects this factor. A new account lowers your average account age and adds a hard inquiry, so opening multiple new cards in a short time can drop your score. The effect fades as the account ages.

How your score updates and what you cannot control

Your credit score updates when creditors report to the bureaus, which typically happens once a month. You might pay off a balance today, but your score may not reflect it for 30 to 45 days. This delay frustrates people, but it is how the system works. You cannot speed it up.

Your score also varies slightly between the three bureaus because not all creditors report to all three. One bureau might have slightly different information than another, so your Equifax score might be different from your Experian score. Lenders may use scores from different bureaus, and some use their own scoring model instead of FICO.

Factors that do not affect your credit score include your income, employment history, age, race, gender, or marital status. Lenders may consider these things when deciding whether to lend to you, but they do not go into your credit score. Your score is built only from credit behavior.

Frequently Asked Questions

What is a good credit score?

FICO scores range from 300 to 850. Scores above 670 are generally considered good; above 740 is very good; above 800 is excellent. Scores below 580 are considered poor. Different lenders set their own thresholds, so a score that qualifies you for one loan might not may have access to you for another. Your score is just one factor lenders consider.

Can I improve my credit score quickly?

No single action produces a fast jump. Paying down credit card balances lowers your utilization and can improve your score within weeks. Disputing errors on your report can help if the errors are removed. Missed payments and collections accounts take years to stop hurting. Building a higher score is a slow process.

Does checking my own credit score hurt it?

No. Checking your own credit is a soft inquiry and does not affect your score. You can check it as often as you want without penalty. You are may have access to to one free report per year from each bureau at annualcreditreport.com.

Why did my score drop even though I paid my bills on time?

Several things can lower your score without a missed payment: opening a new account (hard inquiry and lower average age), closing an old account (lower average age and higher utilization), or a creditor reporting a higher balance than last month. Check your credit report to see what changed.

How long does a missed payment stay on my credit report?

Seven years from the date it first became late. After seven years, it falls off automatically. Paying the debt does not remove it, but it stops new damage. The older the missed payment, the less it hurts your score.