Now you know your credit score matters, but what actually determines that number? Your score isn't random - it's calculated using five specific factors.
Think of these as the ingredients in your credit score recipe. Each one has a different level of importance.
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Which of the five factors do you guess carries the greatest weight?
The biggest factor is your payment history - it makes up 35% of your score. This tracks whether you pay your bills on time, every time.
Even one late payment can hurt your score, especially if you're just starting to build credit.
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How long do you think a late payment stays on your credit report?
The second most important factor is credit utilization - 30% of your score. This measures how much of your available credit you're actually using.
If you have a $1,000 credit limit and owe $300, your utilization is 30%. Lower is better.
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What utilization percentage do you think credit experts recommend staying under?
Length of credit history accounts for 15% of your score. This includes how long you've had credit accounts and the average age of all your accounts.
Older accounts help your score, which is why closing your first credit card can actually hurt you.
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What's one reason you might want to keep an old credit card open?
The remaining 20% comes from credit mix (10%) and new credit inquiries (10%). Credit mix means having different types of accounts like cards and loans.
New inquiries happen when you apply for credit. Too many applications in a short time can lower your score.
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About how many credit applications in a year do you think is too many?
Here's the key insight: payment history and credit utilization together make up 65% of your score. Focus on these two and you'll see the biggest impact.
Pay on time and keep balances low - these simple habits drive most of your score.
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Between payment history and utilization, which one feels easier for you to manage?
Type
Swipe Left or Right
Practice Question
Let's test your understanding of credit score factors. Swipe each action based on whether it has a HIGH impact or a LOWER impact on your score.
Labels
- Left Label: High Impact
- Right Label: Lower Impact
Left Label Items
- Paying your bills on time every month
- Keeping your credit card balances very low
Right Label Items
- Having several different types of credit (mix)
- The average age of your credit accounts
- Applying for a new loan
- Closing your oldest credit card
