The Five Main Credit Scoring Factors

Your credit score is an important part of your loan application. But it takes more than on-time payments to build a good credit score. Five factors help explain how credit agencies evaluate the information in your credit reports when calculating your personal credit score. The better your score on each of these factors, the higher your overall credit score. These five main factors include:

  • Payment History (35%): Paying bills and loan payments on time can improve your payment history score.
  • Debt Utilization (30%): Maintaining low balances on your credit cards can improve your debt utilization score.
  • Credit History/Age (15%): If you have a short credit history, you can improve your credit history score by building credit to demonstrate responsible financial behavior.
  • Credit Inquiries/New Credit Checks (10%): Too many applications for credit and new credit accounts can bring your scores down.
  • Types of Credit (10%): A mix of different types of credit accounts can help earn a higher score.

Of these five factors, payment history carries the most weight, which is why it’s so important not to miss payments. But your overall debt is close behind as the second most important factor.

Because multiple factors impact your credit score, attempting to improve them can get pretty complicated. Each factor can interact with others, making it hard to say exactly how much a particular action (a late payment or credit inquiry, for example) will affect your overall score. That doesn’t mean you need to throw your hands up in frustration, though you may be tempted to! The basics apply no matter which scoring model is used to evaluate your credit report data. Understanding these factors and following some key strategies can help you build and maintain strong credit.



Some information on this page is adapted from content that originally appeared on, a Venturize supporter.

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