Credit Score 101: What Lenders Actually Look At
Your credit score is a three-digit number that controls your financial life. Here's exactly how it's calculated — and how to improve it fast.
Financial Writer
The Five FICO Factors
Payment history (35%) is the biggest factor — one missed payment can drop your score by 100 points. Credit utilization (30%) is second — keep balances below 10% of your limit for optimal scoring. Length of history (15%), credit mix (10%), and new credit inquiries (10%) make up the rest.
Quick Wins
Pay down credit card balances to below 10% utilization. This single action can raise your score 30–50 points within a billing cycle. Set up autopay for minimum payments to avoid missed payment penalties.
Common Myths Debunked
Checking your own score (soft inquiry) does NOT hurt your score. Closing old cards can hurt your score by reducing available credit. Carrying a small balance does NOT help your score — pay in full every month.
Target Score Thresholds
700+ gets you approved for most products. 740+ qualifies you for the best rates on mortgages and auto loans. 800+ is "exceptional" and unlocks the most favorable terms on everything.
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