The 5 Factors That Determine Your Credit Score

The 5 Pillars of Your Credit Score

Every point in your credit score comes from one of five categories. Understanding these pillars is the first step to strategic credit repair.

1. Payment History, 35% of Your Score

This is the single most important factor. Even one 30-day late payment can drop your score by 60-110 points.

What hurts: Late payments, collections, charge-offs, bankruptcies, foreclosures What helps: Consistent on-time payments, payment plans for past-due accounts

Business owner tip: Set up autopay for minimum payments on all accounts. A missed payment on a $50 credit card hurts just as much as missing a $5,000 payment.

2. Credit Utilization, 30% of Your Score

This measures how much of your available credit you're using. It's calculated per-card AND across all cards.

Formula: (Total balances ÷ Total credit limits) × 100

Example: $3,000 balance on $10,000 limit = 30% utilization

Optimal strategy:

3. Length of Credit History, 15%

Average age of all accounts matters. Opening new accounts lowers your average.

Strategy: Keep oldest accounts open, even if unused. Use them for small recurring charges.

4. Credit Mix, 10%

Lenders want to see you can handle different types of credit:

5. New Credit, 10%

Each hard inquiry can cost 5-10 points. Multiple inquiries for the same loan type within 14-45 days count as one.

Action Step: Get your free $1 credit scan to see exactly which factors are hurting your score most.