What Shapes Your Credit Score and How to Strengthen It

Key Takeaways

• Your credit score affects your ability to get credit and secure lower interest rates.

• The FICO® score is the most widely used measure of creditworthiness.
• Scores are based on payment history, amounts owed, credit history length, credit mix, and new credit.
• You can improve your score by paying on time, keeping balances low, maintaining accounts, and monitoring your credit.

A strong credit score is more than just a number—it’s a key financial tool that can open doors to opportunities. It can determine whether you qualify for a mortgage, secure lower interest rates, or access other types of credit when you need it. Among the different scoring models, the FICO® score is the most widely used by lenders, providing a standardized snapshot of your creditworthiness and shaping the financial options available to you.

Many Americans struggle with understanding credit, and three in five report that limited financial knowledge has led to costly mistakes.¹ With so much riding on your credit score, understanding how it’s calculated—and taking steps to strengthen it—can give you greater control over your financial future.

Clearing Up Common Myths

Many people assume factors outside of their control impact their score. The truth is, personal details such as gender, race, religion, marital status, age, income, employment history, or where you live are not considered in your credit score. Similarly, soft credit checks (such as pre-approvals), participation in credit counseling, and keeping family support obligations current have no impact on your score.

Your credit score reflects your financial behavior—the way you borrow and repay—not your personal background

The Five Factors That Shape Your FICO® Score

Here are the key building blocks of your score:

1. Payment History (35%)

Your track record of paying bills on time is the most important factor. Even one missed payment can have a meaningful impact. Making consistent, on-time payments is the best way to protect your score.

2. Amounts Owed (30%)

This measures how much of your available credit you’re using, also known as your credit utilization ratio. A good guideline is to keep your usage under 30% of your available credit line.

3. Length of Credit History (15%)

The longer your accounts remain open and active, the more positive impact they can have. Closing accounts too quickly after opening them can reduce the average age of your credit history.

4. Credit Mix (10%)

Having a variety of credit types—such as credit cards, auto loans, and mortgages—can help demonstrate that you can manage different forms of debt responsibly.

5. New Credit (10%)

Opening several new accounts in a short time can hurt your score, especially if you’re new to credit. Each application usually results in a hard inquiry, which may cause a temporary dip.

Your Path to a Stronger Credit Profile

The good news is your credit score is something you can actively shape. Consistent habits go a long way: pay your bills on time, keep balances under 30% of your available credit, and work to reduce revolving debt when possible.

Long-standing accounts also play a role. Older credit lines help strengthen your history, so think carefully before closing them. Be intentional with new credit, applying only when needed and spacing out applications to limit hard inquiries.

A balanced credit mix—such as cards, loans, and a mortgage—can further demonstrate your ability to manage different types of debt. Just as important, monitor your credit regularly. Reviewing your report not only helps you understand the factors that drive your score but also gives you the chance to spot mistakes or fraud early.

By following these strategies, you’re doing more than raising a number—you’re building a stronger, more resilient financial profile that supports your long-term goals.

Frequently Asked Questions

1. What is a credit score and why does it matter? Your credit score is a measure of your creditworthiness. Lenders use it to decide whether to approve you for credit and what interest rates to offer. A higher score can open the door to better financial opportunities.

2. What factors shape my FICO® score? Your score is based on five key factors: payment history (35%), amounts owed (30%), length of credit history (15%), credit mix (10%), and new credit (10%).

3. What doesn’t affect my credit score? Personal details like age, race, gender, marital status, income, or employment history are not included. Soft inquiries, such as pre-approval checks, also don’t impact your score.

4. How much of my credit limit should I use? Try to keep your credit utilization below 30% of your available credit. Lower usage signals stronger financial management to lenders.

5. Should I close old credit accounts? Usually no—keeping long-standing accounts helps build credit history. Closing old accounts can shorten your credit age and potentially lower your score.

6. What’s the best way to start improving my score? Focus on consistent on-time payments, keeping balances low, maintaining older accounts, applying for new credit sparingly, and monitoring your credit report for accuracy.