What affects your credit score — and by how much
Key takeaways
04 · ideas- Payment history is the single largest factor at 35%
- Credit utilization under 30% is a widely cited benchmark
- Hard inquiries have a small and temporary effect
- Score models differ between FICO and VantageScore
Basic level
The essentials · 2 min
Most US lenders use FICO scores, which range from 300 to 850. The score is calculated from five categories:
| Factor | Weight | What it measures |
|---|---|---|
| Payment history | 35% | On-time vs. late payments |
| Amounts owed | 30% | Credit utilization ratio |
| Length of credit history | 15% | Age of accounts |
| Credit mix | 10% | Types of credit |
| New credit | 10% | Recent applications |
Payment history has the most weight. A single 30-day late payment can reduce a score by 50-100 points depending on the starting score and other factors.
Credit utilization is the percentage of available revolving credit currently used. Both the overall ratio and per-card ratios affect the score.
Intermediate level
How it applies · 2 min
Score tiers and loan access
| FICO Score | Category | Typical loan access |
|---|---|---|
| 800-850 | Exceptional | Best available rates |
| 740-799 | Very Good | Competitive rates |
| 670-739 | Good | Approval likely, standard rates |
| 580-669 | Fair | Approval possible, higher rates |
| Below 580 | Poor | Limited access |
Hard vs. soft inquiries
A hard inquiry occurs when you apply for new credit. It typically reduces your score by 2-10 points and remains on your report for two years.
A soft inquiry (checking your own score, pre-approval checks) does not affect your score.
Rate-shopping exception: Multiple mortgage or auto loan inquiries within 14-45 days (depending on model) are typically treated as a single inquiry.
Advanced level
The math, step by step · 1 min
FICO 8 vs. other models
Lenders may use FICO 2, 4, 5, 8, or 9 depending on the loan type. Mortgage lenders typically use FICO 2, 4, and 5 (older models from each bureau). These models weight factors differently and treat thin credit files differently.
FICO 9 and VantageScore 4.0 ignore paid collections and weight medical collections less than older models — relevant for consumers with past medical debt.