How do credit scores actually work?
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tl;dr
A credit score is a repayment forecast, typically 300-850, built from five weighted inputs — payment history alone is 35%. Pay on time, use little of your limit, let accounts age, apply rarely. The number follows habits, not tricks.
Show the written answerThe written answer
A credit score is a single number — usually between 300 and 850 — that predicts one thing: how likely you are to repay borrowed money. It is computed from your borrowing record, and the biggest input by far is simply whether you pay on time.
The five inputs
The classic FICO recipe weighs five things: payment history (35%), how much of your available credit you use (30%), the age of your accounts (15%), recent applications for new credit (10%), and the variety of credit you handle (10%). No income, no savings, no diplomas — only how you've handled borrowed money.
The loop that follows you
Lenders report your behavior to credit bureaus monthly; the formula reweighs your file; the updated number decides the interest rates you're offered next. Good terms make debt cheaper to manage, which makes good behavior easier — the loop compounds in both directions.
What actually moves it
Pay every bill on time, keep card balances well below their limits, let old accounts age, and apply for new credit rarely. One myth to drop: carrying a balance does not help. The score rewards your record of paying — the interest only buys the bank lunch.
cited
Sources
- [01]What's in my FICO Scores? — myFICO
“FICO Scores are calculated from five categories: payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%) and credit mix (10%).”
people also ask
Keep asking
Does checking my own score lower it?
No. Checking your own score is a soft inquiry and doesn't touch the number. Only hard inquiries — actual applications for new credit — can trim a few points, and even those fade within months.
Why did my score drop after paying off a loan?
Closing an account can shorten your average credit age and narrow your credit mix — two smaller inputs. The dip is usually temporary; the paid-off loan itself remains a positive mark in your history.
How fast can a bad score recover?
Missed payments hurt most in their first two years and age off entirely after about seven. Meanwhile every on-time month stacks new evidence in your favor — most recoveries show real progress within a year of clean payments.
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