The Five Factors Behind Your Score

Payment history (35%) — on-time payments are the single most important factor Credit utilization (30%) — the percentage of available credit you are currently using Length of credit history (15%) — older accounts demonstrate long-term reliability Credit mix (10%) and new inquiries (10%) round out the remaining factors

Score Ranges and What They Mean

800-850: Exceptional — qualifies for the best rates and terms available 740-799: Very Good — qualifies for most competitive rates on loans and credit 670-739: Good — generally approved but may not receive the lowest rates Below 670: Fair to Poor — higher rates, more limited options, or possible denial

How to Improve Your Score

Pay every bill on time — even one 30-day late payment can drop your score significantly Keep credit utilization below 30%, and ideally below 10%, of each card's limit Keep old accounts open — closing them shortens your history and raises utilization Limit hard inquiries by rate-shopping within a short window (14-45 days counts as one)

Common Credit Score Myths

Checking your own score is a soft inquiry — it does not hurt your credit Closing unused cards actually raises utilization and shortens history Carrying a balance does not build credit — paying in full each month works just as well Income is not a factor in credit score calculations despite common belief

Impact on Borrowing Costs

A 100-point score difference can mean 0.5-1.5% higher mortgage interest rates On a $400K mortgage, a 1% rate difference costs roughly $80K more over 30 years Auto loans, personal loans, and insurance premiums are also influenced by credit scores Strong credit saves thousands over a lifetime — it is worth actively maintaining

Protecting Your Credit

About 1 in 5 consumers has an error on at least one credit report — check yours regularly AnnualCreditReport.com provides free credit reports from all three bureaus weekly Dispute errors directly with the bureau online, by mail, or by phone A credit freeze prevents new accounts from being opened in your name — free to set up

Understanding Credit Scores: What They Are and How to Improve Yours

Curated by: Rubric Advisors

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What Credit Scores Are

A credit score is a three-digit number (300-850) summarizing your creditworthiness
FICO scores are used in 90% of lending decisions — VantageScore is the main alternative
Scores are calculated from data in your credit reports at Equifax, Experian, and TransUnion
Different scoring models can produce different scores from the same report data

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What Credit Scores Are

The Five Factors Behind Your Score

Score Ranges and What They Mean

How to Improve Your Score

Common Credit Score Myths

Impact on Borrowing Costs

Protecting Your Credit

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What Credit Scores Are

The Five Factors Behind Your Score

Score Ranges and What They Mean

How to Improve Your Score

Common Credit Score Myths

Impact on Borrowing Costs

Protecting Your Credit

Related Topics

Identity Theft Protection: Prevention, Detection, and Recovery

ABLE Accounts: Tax-Advantaged Savings for Disabilities

ACA Health Insurance for Early Retirees