Credit Score
One three-digit number decides your mortgage rate, your car loan, sometimes even your apartment application — and most people have never seen what actually moves it.
What Is It
A credit score (FICO, the most widely used model, ranges 300–850) summarizes creditworthiness into a single number, built from five weighted factors: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%), and credit mix (10%). Each factor is drawn from the details already sitting in a credit report — the score is a summary of that history, not a separate judgment call. VantageScore is the other major model in use, with a similar range and similar underlying factors, though the exact weighting differs slightly from FICO’s.
Why It Matters
Payment history and amounts owed together make up 65% of the score — meaning paying on time and keeping balances low does more for a score than almost anything else combined. Length of credit history is the one factor that can’t be sped up — it only improves with time, which is why closing an old, unused card can quietly hurt a score by shortening average account age, even though it feels like a harmless cleanup move.
New credit and credit mix matter too, but far less — opening several new accounts in a short window, or having only one type of credit, dings the score at the margins rather than driving it the way the top two factors do. A mix of a credit card, an auto loan, and a mortgage, for instance, generally reads as slightly stronger than credit cards alone, though this factor rarely moves the needle much on its own.
Quick Example
A single 30-day-late payment can drop a score by a meaningful amount — often 60–100+ points for someone who previously had strong credit, precisely because payment history carries the most weight. That impact fades over time as more on-time payments accumulate, but it doesn’t disappear quickly — a late payment can stay on a credit report for up to 7 years, even as its effect on the score diminishes well before that.