Payment history: about 35%
Payment records show whether accounts were paid as agreed. A missed payment may matter more when it is recent or severe, but the effect varies with the rest of the file. Setting automatic minimum payments and checking due dates can help prevent a new late mark. If a reported late payment is inaccurate, dispute it with supporting evidence.
Amounts owed: about 30%
This includes balances and how much of your available revolving credit you use. For example, a $300 balance on a $1,000 card is 30% utilization for that card. Lower balances may help, but the score effect is not a fixed number of points. Paying a card in full by its due date can avoid interest if the grace period applies; carrying interest is not necessary to build credit.
Length of history: about 15%
Scoring considers factors such as the age of your oldest and newest accounts and average account age. Time helps establish a track record. Closing an old card is a decision to evaluate carefully because it can also change available credit.
New credit: about 10%
Recent applications and newly opened accounts can affect this category. A single inquiry is usually a smaller consideration than the full profile. Rate-shopping treatment can vary by loan type and model.
Credit mix: about 10%
Experience with different account types can contribute, but do not borrow money solely to create a mix. Managing the accounts you already have responsibly is usually more practical.
Why two scores can differ
FICO has multiple versions, and VantageScore is another scoring family. Bureaus may also hold different data or update at different times. The score in an app may not be the version your lender uses. Collections and late payments can affect several aspects of a credit profile, but there is no universal points penalty.
Where to begin
- Review reports from all three bureaus at AnnualCreditReport.com.
- Prioritize on-time payments and manageable revolving balances.
- Dispute only information that is inaccurate or incomplete, using documents.
- Give changes time to be reported; no action guarantees a particular increase.
Sources
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