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January 17, 2025 at 12:31 pm #1185
Kikoff
KeymasterJanuary 17, 2025 at 12:50 pm #1195Kikoff
KeymasterThe four most important factors for your credit score are: payment history, credit utilization, account age, and credit mix. Together, these factors make up 90% of your credit score.
- Payment history contributes about 35% to your credit score, making it the most important factor in your score by percentage. As you might expect, payment history just means whether you’ve paid your past credit bills (loan, credit card, mortgage) on time.
- Credit utilization makes up less of your score, at roughly 30%. This term refers to how much of your credit you’re using, and you’ll see it as a percentage. The lower your ratio is, the better your score, generally speaking. A good rule of thumb is to aim for a credit utilization ratio of 30% or lower.
- Account age is next, making up about 15% of your credit score. Your account age is the average age of every single one of your credit accounts. The longer you’ve had your oldest account, the higher your account age will be, which is what you want.
- Credit mix is last, accounting for about 10% of your credit score. Having a “good” credit mix shows lenders you can handle multiple products well (eg, student loans, credit cards, auto loans).
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