Payment history and amounts owed make up 65% of your FICO score, but credit mix, length of history, and new inquiries account for the rest. Paying on time matters most, but closing old accounts, applying for multiple cards at once, or carrying no installment debt can quietly drag your score down. Know what’s moving the needle before you act.
Here’s the full formula: payment history counts for 35% of your FICO score, amounts owed for 30%, length of credit history for 15%, credit mix for 10%, and new credit for 10%. The advice everyone repeats, “pay your bills on time,” manages just over a third of it.
The trouble starts in the categories nobody watches. Close a paid-off card and your available credit shrinks, so your utilization, the share of your limits you’re using, jumps the same day. Years later, that closed account falls off your report and shortens your average history. Apply for several cards in one month and the inquiries pile up against new credit. Carry nothing but credit cards and your mix looks thin.
None of these feel like mistakes when you make them. That’s what makes them expensive.
Three habits cover most of it. Keep your oldest cards open, each with a small recurring charge so the issuer doesn’t close them for inactivity. Keep reported balances under 30% of each card’s limit, and under 10% if you can. Scores update as soon as lower balances hit your report, so this lever moves fast.
If high balances are the problem, ask your issuer for a credit limit increase. It lowers utilization without opening a new account. Space applications a few months apart, and skip loans you don’t need. Credit mix builds on its own the next time you finance a car or a home.
Pull your free reports at AnnualCreditReport.com and see which components are costing you points. You can’t fix a category you’ve never looked at.
Editorial & Advertiser Disclosure: The editorial content on this website is not provided, commissioned, reviewed, approved, or otherwise endorsed by any advertiser. Opinions expressed are ours alone, not those of any advertiser. The offers that appear are from companies from which we may receive compensation. However, this compensation does not impact where and how these companies are mentioned on the site. We do not include all companies or all available offers in the marketplace.
Related:
