Lesson 1 of 5

What actually makes up your credit score

A FICO credit score is calculated from five factors, in order of impact: payment history (about 35%), amounts owed / credit utilization (about 30%), length of credit history (about 15%), new credit (about 10%), and credit mix (about 10%). Knowing the weighting matters, because it tells you where effort actually moves the number. Payment history means exactly what it sounds like: paying at least the minimum, on time, every time, on every account. A single 30-day-late payment can meaningfully drop a score and stays on your credit report for up to seven years. This is the single highest-impact factor, and it's also the most within your control -- automating minimum payments (covered in the Paychecks course) protects this directly. Utilization -- how much of your available credit you're using -- is the second-biggest factor and one of the fastest to improve, since it reflects your current balances, not years of history. The next lesson covers it in detail, because it's the factor most people misunderstand.