What Affects Your Score

Five main factors shape your credit score:

1. Payment history (35%) — paying bills on time is crucial.
    

2. Credit utilization (30%) — using less than 30% of your available limit shows responsibility.
    

3. Length of credit history (15%) — older accounts boost stability.
    

4. New credit inquiries (10%) — applying for too many cards lowers your score.
    

5. Credit mix (10%) — a variety of accounts (cards, loans) helps.

Why It Matters

A higher credit score means better access to loans and lower interest rates. For example, someone with a score above 750 may save thousands on a mortgage compared to someone at 650. Employers and landlords also sometimes review credit reports to gauge reliability.

How to Improve Your Score

• Pay on time: Set reminders or automate bills.

• Lower utilization: Try to keep balances under 30% of limits.

• Avoid unnecessary applications: Space out credit requests.

• Check for errors: Review reports annually via free credit agencies and dispute inaccuracies.

• Keep old accounts: Even unused cards add valuable history.