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What categories affect your credit score?

Published July 3, 2023
4 min read

Key Points About: Credit Score Categories

  1. Your credit score helps lenders decide your creditworthiness.

  2. Your payment history, credit utilization, length of credit history, new credit applications, and your credit mix make up your credit score.

  3. A good credit score may help you get approved for credit in the future.

What is a credit score and why is it important?

According to the Fair Isaac Corporation (FICO), your credit score is a three-digit number calculated from the information found in your credit report. Your credit score tells lenders how likely you are to pay back the money you borrowed based on your credit history. While there are different credit scoring models, 90% of top lenders use FICO® Credit Scores.1

FICO® Credit Score Ranges

  • Exceptional—800 to 850
  • Very good—740 to 799
  • Good—670 to 739
  • Fair—580 to 669
  • Poor—579 or less

Your credit score is one of the most important numbers that you'll have in your life, but do you know what goes into a credit score and how you can improve yours?

Did you know?

If you’re new to credit, you can build your credit history with the Discover it Secured Credit Card.2

What categories make up your credit score?

Based on the FICO credit scoring model, the following key credit categories help make up your score:

Payment history (35%)
Amounts owed (30%)
Length of credit history (15%)
New credit (10%)
Credit mix (10%)

Payment history

Your payment history looks at whether you’ve paid your past credit accounts on time.

According to myfico.com, because your payment history makes up 35% of your FICO® Credit Score, you should try to pay all your bills on time. You can put your bills on autopay or set up text or email alerts to help you avoid late payments.

You can choose to pay only the minimum amount due on your credit card. However, if you pay your statement balance each month, you could possibly avoid interest charges, and may help lower your credit card utilization too.

Credit Utilization

Your credit utilization is the amount of credit that you owe compared to the amount of available credit that you have.

For example, if you have a $1000 balance on a credit card with a $8,000 limit, your credit use for that card would be 12.5%. To find your credit card utilization across all cards, you would divide the total balance across all your cards by your total credit limit, and then get the percentage.

According to the Office of Financial Readiness, you should ideally aim for a credit utilization ratio of 1-10%. One way that you can help maintain a low credit utilization rate is by paying more than your minimum payment each month.

Length of credit history

Your length of credit history looks at how long you’ve managed your different credit accounts. The only way to get a longer credit history is just to wait, but if you’re new to credit, you can build a credit history with a secured credit card.

New credit

New credit measures how often you applied for new credit accounts. When you open a new credit account, this can result in a hard inquiry appearing on your credit file. Hard inquiries can negatively affect score temporarily, so you should only open new credit accounts sparingly.

If you want to shop around for credit cards, one option you have is to check to see if there are any cards that you prequalify for. When you prequalify for a credit card, it typically only results in a soft inquiry and doesn’t hurt your credit score. Check which cards you prequalify for and compare offers for the best credit card for you before applying for one.

Credit mix

Credit mix is the different types of credit accounts that you have, like credit cards, personal loans, auto loans, and mortgages. Your credit mix makes up a small part of your credit score, but it is helpful to have different forms of credit.  

Why do I have different credit scores?

You can sometimes have different credit scores because there may be different information on your credit file at the three major credit bureaus (Equifax, TransUnion, and Experian).

How can I improve my credit?

If you want to stay on top of your credit score, there are some things you can do that may help:

  • Pay your bills on time.
  • Pay down your credit card balance.
  • Maintain a good mix of credit.
  • Limit the amount of new credit lines you open.
  • Check your credit report for any errors.

Why is a good credit score important?

Good credit can help you reach more of your financial goals and qualify for more credit offers. For example, good credit can help you qualify for some of the best credit card offers from lenders, like travel cards or cash back rewards credit cards. Understanding what categories make up your credit score will go a long way in helping you to improve it.

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  1. FICO® Credit Score Terms: Your FICO® Credit Score, key factors and other credit information are based on data from TransUnion® and may be different from other credit scores and other credit information provided by different bureaus. This information is intended for and only provided to Primary account holders who have an available score. See Discover.com/FICO about the availability of your score. Your score, key factors and other credit information are available on Discover.com and cardmembers are also provided a score on statements. Customers will see up to a year of recent scores online. Discover and other lenders may use different inputs, such as FICO® Credit Scores, other credit scores and more information in credit decisions. This benefit may change or end in the future. FICO is a registered trademark of Fair Isaac Corporation in the United States and other countries. Discover Financial Services and Fair Isaac are not credit repair organizations as defined under federal law or state law, including the Credit Repair Organizations Act. Discover Financial Services and Fair Isaac do not provide “credit repair” services or assistance regarding “rebuilding” or “improving” your credit record, credit history or credit rating.
  2. Build Credit History (Student Card): Discover reports your credit history to the three major credit bureaus so it can help build your credit if used responsibly. Late payments, delinquencies or other derogatory activity with your credit card accounts and loans may adversely impact your ability to build credit.
  • Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.