What affects your credit score

A credit score is built from the information in your credit reports. Scoring formulas differ, but federal regulators describe a common set of factors they tend to look at, and knowing them helps you understand what your score reflects.

What a credit score is

The Consumer Financial Protection Bureau (CFPB) describes a credit score as a prediction of how likely you are to pay back a loan on time, based on the information in your credit reports. A mathematical formula, called a scoring model, produces the number.

Lenders use scores when deciding on things like credit cards, auto loans and mortgages. The CFPB says scores can also be used for tenant screening and insurance, and that they can affect the interest rate and credit limit you’re offered.

According to the FTC, most scores fall in a range of 300 to 850. The CFPB notes that higher scores generally make it easier to qualify for a loan and can lead to better rates or terms.

The factors scoring models generally consider

Different models weigh things differently, and neither the CFPB nor the FTC publishes a single formula. The CFPB lists these as factors scoring models typically consider:

• Your payment history
• How much debt you currently owe
• The number and types of loan and credit card accounts you have
• How long your accounts have been open
• How much of your available credit you’re using
• New applications for credit
• Whether you’ve had a debt sent to collection, a foreclosure or a bankruptcy, and how long ago

Payment history

The CFPB says paying on time has the biggest impact on your score, and that most scores treat repayment history as the main factor. The FTC adds that late payments, collection accounts and bankruptcy can lower a score. If you’ve missed payments, the CFPB’s advice is to get current and stay current. Automatic payments or reminders can help.

How much of your credit you use

Owing a lot compared with your credit limits can count against you. The FTC says balances close to your limits are likely to have a negative effect. There’s more detail in the post on credit utilization.

Length of credit history

The FTC says a short credit history may have a negative effect, but that paying on time and keeping balances low can offset it. The CFPB points out that a longer history gives lenders more information about how you manage credit over time, so think carefully before closing older accounts.

New applications

When you apply for credit, the lender checks your report, which creates an inquiry. The FTC says many recent inquiries can count against you, though not every inquiry counts. Inquiries from businesses monitoring your account or sending prescreened offers aren’t counted. The CFPB notes that many applications in a short period can look like a sign of financial trouble to lenders.

Types of accounts

The FTC says some systems look at the mix of accounts you have. Under some models, having many credit card accounts may have a negative effect, while mortgage and auto loans may not.

Why you have more than one score

You don’t have just one credit score. The CFPB explains that scores can differ depending on:

• The scoring model used
• The type of loan the score is built for
• Which credit reporting company supplied the data
• The day the score was calculated

Your reports at the three nationwide credit bureaus, Equifax, Experian and TransUnion, may not contain exactly the same information. So the same model can produce different numbers depending on the report it uses.

The FTC also notes that a mortgage lender may look at more than your score, such as your down payment, total debt and income.

Your score depends on your report

Because scores come from your credit reports, errors in those reports can affect them. The CFPB suggests checking your reports for mistakes like accounts that aren’t yours, late payments you didn’t make, closed accounts listed as open, and the same debt listed more than once.

As of November 2026, the FTC says you can get free reports from each of the three nationwide bureaus every week at AnnualCreditReport.com, or by calling 877-322-8228. If you find an error, you can dispute it with the credit bureau and with the company that supplied the information. You can read more about your credit rights.

The FTC also points out that checking your score is optional. Scores often cost money, and some companies offer a “free” score only when you enroll in a paid monitoring service, so check for charges before you agree to anything.

The short version

• Scores are built from your credit reports, so accurate reports matter.
• Payment history, amounts owed, length of history, new applications and account types are common factors.
• The CFPB says paying on time has the biggest impact.
• You have many scores, and they can differ by model, data source and date.
• You can check your reports for free at AnnualCreditReport.com.

Sources

• CFPB: What is a credit score?
• CFPB: How do I get and keep a good credit score?
• CFPB: Understand your credit score
• FTC: Credit Scores

General information, not legal or financial advice. Laws and government guidance change, so check the sources above for the latest.