What Affects Your Credit Score the Most?

Laura Adams, MBA
1-minute read

What Affects Your Credit Score the Most?


Quick Tip: What Affects Your Credit Score the Most?

When you’re struggling with a financial decision because you’re not sure how it will affect your credit score, remember the five variables used to calculate your score:

  • 35% comes from your Payment History. Late payments, collections, charge-offs, bankruptcies, legal judgments, and liens take your score down by the largest percentage.

  • 30% comes from your Credit Utilization. Using more of your available credit lowers your score. Instead of maxing-out a credit card or a line of credit, spread your debt over several accounts so they each have lower balances relative to your credit limits.

  • 15% comes from Account History. The longer you have open credit accounts, the better.

  • 10% comes from Credit Inquiries. Applying for too much credit can lower your score.

  • 10% comes from Mix of Credit. Having both revolving and non-revolving credit helps your score. Revolving debt includes credit cards and lines of credit; and non-revolving debt are installment loans, such as mortgages, student loans, or car loans.

Since the first two categories, Payment History and Credit Utilization, make up the biggest percentages, they have the ability to influence your score the most. That means you’ll get the largest boost to your credit from paying bills on time and keeping low balances on credit card accounts.

Credit Dice image from Shutterstock

About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.