A consumer score, most often called a credit score, is a three-digit number between 300 and 850 that condenses your credit history into a single figure lenders use to decide whether to approve you and at what rate. The most widely used model is FICO, which pulls data from your credit file at one of the three nationwide bureaus — Equifax, Experian, or TransUnion — and weighs five categories of information to produce the number. That number then shapes the interest rates you’re offered, the apartments you qualify for, and whether a utility company demands a deposit before turning on your service.
The Five Factors That Move Your Score
FICO publishes the approximate weight each category carries. The percentages are guidelines rather than exact cutoffs, and any factor’s pull can shift depending on how much data is in your file, but they show clearly where effort pays off.
Payment history, about 35%. Whether you pay on time is the single biggest factor. Late payments are recorded in tiers of 30, 60, 90, and 120-plus days past due, and deeper delinquencies hurt more than a single missed deadline.1myFICO. How FICO Considers Different Categories of Late Payments
Amounts owed, about 30%. This is mostly your credit utilization ratio: how much of your available revolving credit you’re currently using. Carrying balances near your card limits signals overextension and pulls the score down. Bringing utilization well below your limits is one of the fastest ways to move the number.
Length of credit history, about 15%. Older accounts help because they prove a longer track record. Closing your oldest card can shorten your average account age and do more harm than most people expect.
New credit, about 10%. Each application for credit triggers a hard inquiry. Hard inquiries stay on your report for two years, though FICO only factors them into the score for the first 12 months.2myFICO. The Timing of Hard Credit Inquiries – When and Why They Matter
Credit mix, about 10%. Carrying different types of accounts, such as credit cards alongside an installment loan or a mortgage, can help modestly. This is the least influential factor. Nobody should take out a loan just to diversify.
One safeguard matters if you comparison-shop. When you apply for a mortgage, auto loan, or student loan and multiple lenders pull your credit within a 45-day window, all those inquiries count as a single inquiry for scoring purposes.3Consumer Financial Protection Bureau. What Happens When a Mortgage Lender Checks My Credit The model recognizes you’re shopping for one loan, not applying for ten.
What the Numbers Actually Mean
FICO scores fall into five broad tiers, and the tier you land in determines the rates and terms lenders are willing to offer.4myFICO. What Is a Credit Score
- Below 580 is considered poor. Many lenders decline outright, and those that approve charge steep rates.
- 580 to 669 is fair, below the national average. Approval is possible but rates are higher and credit limits smaller.
- 670 to 739 is good, at or slightly above average. Most lenders approve at competitive rates.
- 740 to 799 is very good. Better-than-typical rates are available on most products.
- 800 and above is exceptional. Small fluctuations at this level rarely change what you’re offered.
The gap between fair and good can translate to tens of thousands of dollars in interest over the life of a mortgage. A second model called VantageScore uses the same 300-to-850 range in its current versions and shows up in many of the free score tools offered by banks and credit card companies. The two models weigh factors somewhat differently, so your FICO and VantageScore won’t always match even when both draw from the same report.
What Doesn’t Count
Several pieces of personal information never enter the scoring formula, even when they appear on your credit report. Your income, salary, job title, and employment status have no effect on the calculation. A raise won’t boost your score, and losing a job won’t lower it, all else equal. Creditors may ask for employment details on applications to verify your identity, but that information stays off the scorecard.
Federal law also prohibits scoring models from using race, religion, gender, national origin, or marital status. Age isn’t a factor either, though the length of your credit history, which naturally correlates with age, does count. Checking your own report is a soft inquiry and never hurts your score, so there is no reason to avoid monitoring it.
How Long Negative Marks Stay
Federal law caps how long derogatory information can appear on your report. Most negative items, including late payments, collections, and charge-offs, must be removed seven years from the date of the original delinquency.5Office of the Law Revision Counsel. 15 USC 1681c – Requirements Relating to Information Contained in Consumer Reports The clock starts when you first fell behind, not when the account was closed or sold to a collector.
Bankruptcy is the exception. A Chapter 7 filing can stay on your report for up to ten years from the date the court entered the order for relief.5Office of the Law Revision Counsel. 15 USC 1681c – Requirements Relating to Information Contained in Consumer Reports A Chapter 13 bankruptcy, where you repay a portion of your debts under a court-supervised plan, is typically removed after seven years, even though the statute technically allows reporting for up to ten.
One important change: tax liens and civil judgments no longer appear on credit reports from the three major bureaus. Those records were removed in 2017 and 2018 after the bureaus adopted stricter data-quality standards, and none remained by April 2018.6Consumer Financial Protection Bureau. A New Retrospective on the Removal of Public Records Bankruptcies are now the only public record on a standard credit report.
How to See Your Own Report
Federal law entitles you to one free credit report every 12 months from each of the three nationwide bureaus.7Office of the Law Revision Counsel. 15 USC 1681j – Charges for Certain Disclosures On top of that baseline, the three bureaus have permanently extended a program that lets you check each report once a week for free through AnnualCreditReport.com. Through 2026, Equifax is also offering six additional free reports per year through the same site, beyond the standard annual entitlement.8Federal Trade Commission. Free Credit Reports
You’re also entitled to a free report outside the normal cycle in several situations:
- You received an adverse action notice denying credit, insurance, employment, or housing based on your report. Request within 60 days.
- You’re unemployed and plan to look for work within 60 days.
- You’re receiving public assistance.
- Your report is inaccurate because of identity theft or fraud.
- You have a fraud alert on your file.
Online at AnnualCreditReport.com is the fastest option, with results typically appearing within minutes. By phone at 1-877-322-8228, reports are processed and mailed within 15 days. By mail using the Annual Credit Report Request Form, processing also takes up to 15 days from when the bureau receives your request.7Office of the Law Revision Counsel. 15 USC 1681j – Charges for Certain Disclosures Delivery may take longer if the bureau needs more proof of identity.
To match you to the correct file, bureaus ask for your full legal name, Social Security number, date of birth, and current address. If you’ve moved recently, giving a previous address helps with record matching. Federal regulations describe these as examples of reasonable identity requirements rather than absolute mandates, but every bureau requests all four in practice.9Consumer Financial Protection Bureau. 12 CFR 1022.123 – Appropriate Proof of Identity If automated verification can’t confirm who you are, you may need to mail copies of a government-issued ID or proof of address such as a utility bill or bank statement.
The report itself doesn’t include your score. Scores are sold separately, though many banks and card issuers now provide a free FICO or VantageScore on monthly statements or through their online portals.
Fixing Errors That Drag Your Score Down
Errors on credit reports are more common than people assume, and an uncorrected mistake can cost real money in higher interest rates or outright denials. If you spot inaccurate information, you can dispute it directly with the credit bureau at no charge. The bureau must then investigate and either correct the information or confirm its accuracy within 30 days.10Office of the Law Revision Counsel. 15 USC 1681i – Procedure in Case of Disputed Accuracy If you send additional supporting documents during that initial period, the bureau gets up to 15 extra days, for 45 total.
Within five business days of receiving your dispute, the bureau must notify the company that originally reported the information and pass along everything you submitted.10Office of the Law Revision Counsel. 15 USC 1681i – Procedure in Case of Disputed Accuracy That company has its own obligation to investigate and report back. If the disputed item can’t be verified, the bureau must delete it.
If the investigation doesn’t go your way, you can add a brief statement to your credit file explaining your side. Future reports will include or summarize it.11Consumer Financial Protection Bureau. What if I Disagree with the Results of My Credit Report Dispute That right applies to disputes you file with the credit bureau itself, not disputes sent directly to the company that furnished the data.