The 5 Factors That Make Up Your FICO Score — Explained Simply

Your FICO score is the most widely used credit score in the U.S. — used in over 90% of lending decisions. Understanding exactly how it's calculated gives you a roadmap to improving it.

Here are the five factors, in order of importance.

1. Payment History — 35%

This is the single biggest factor. Every on-time payment strengthens your score. Every late payment — even one — can drop it significantly. The later the payment and the more recent it is, the worse the impact.

What to do: Set up autopay for at least the minimum on every account. One missed payment can cost you 50–100 points.

2. Credit Utilization — 30%

This is the ratio of your credit card balances to your credit limits. A $500 balance on a $1,000 limit card = 50% utilization. That's too high.

• Aim for under 30% on each card and overall
• For maximum scoring benefit, target under 10%
• Utilization is recalculated monthly — paying down a balance can boost your score within 30 days

3. Length of Credit History — 15%

The longer your credit history, the better. FICO looks at the age of your oldest account, your newest account, and the average age of all accounts.

What to do: Never close your oldest credit cards, even if you don't use them. A zero-balance old card with no annual fee is pure upside.

4. Credit Mix — 10%

Having different types of credit — revolving (credit cards) and installment (car loans, mortgages, personal loans) — shows lenders you can manage various credit products responsibly.

This factor matters less than the top three, but a credit builder loan is an easy way to add an installment account if you only have credit cards.

5. New Credit — 10%

Every time you apply for new credit, a hard inquiry is placed on your report and your score dips slightly — usually 3–7 points. Multiple inquiries in a short window signal risk to lenders.

Exception: Rate shopping for a mortgage or car loan within a 14–45 day window typically counts as a single inquiry.

The Fast Path to Score Improvement

Understanding these factors shows you exactly where to focus. For most people, the highest-impact moves are paying down credit card balances, disputing inaccurate items on your report, and never missing a payment going forward.