FICO Score Explained: The 5 Factors That Determine Your Credit Score and How to Improve Each

Your FICO score ranges from 300 to 850 and is calculated from five weighted factors drawn from your credit report. Lenders use FICO scores to decide whether to approve applications and at what interest rate — a difference of 50 points can mean the difference between approval and denial, or between a 7% and a 12% mortgage rate. Despite its importance, the exact calculation remains proprietary, but FICO has published the five factors and their approximate weights — giving you a clear roadmap for improvement.

The Five FICO Score Factors

• Payment History — 35%

  The single most impactful factor. Any missed payment damages your score; a 90-day late payment can drop scores 60–110 points. Conversely, consistent on-time payments are the most reliable way to build and maintain a high score. Set up autopay for at least the minimum on every account — even one missed payment is significant.

• Amounts Owed (Credit Utilization) — 30%

  The ratio of your credit card balances to credit limits. Using 80% of your available credit hurts your score significantly even with perfect payment history. FICO recommends keeping utilization below 30%; top scorers typically maintain below 10%. Pay balances before the statement closing date — not just before the due date — to lower the reported utilization.

• Length of Credit History — 15%

  Includes the age of your oldest account, your newest account, and the average age of all accounts. This is why closing old credit cards (even unused ones) hurts your score — it reduces your average account age. Keep old accounts open with minimal activity to preserve this factor.

• Credit Mix — 10%

  FICO rewards borrowers who successfully manage different types of credit: revolving (credit cards), installment (auto loans, mortgages, personal loans), and open accounts. You don't need every type, but having both credit cards and an installment loan demonstrates diversified credit management.

• New Credit (Inquiries) — 10%

  Each hard inquiry (generated when you apply for new credit) temporarily reduces scores by 5–10 points. Multiple inquiries within a 14–45 day window for the same loan type (mortgage, auto) count as a single inquiry. Avoid applying for new credit in the 6 months before any major loan application.

The fastest improvement typically comes from reducing credit utilization — paying down or paying off credit card balances. If you have a $10,000 limit and $7,000 balance, paying it down to $1,000 can increase your score by 40–80 points within one billing cycle. The second fastest improvement is disputing and correcting inaccurate negative items on your credit report — errors affect approximately 20% of reports. Third, becoming an authorized user on a family member's excellent-credit account adds their positive history to your report immediately. These three actions combined can raise a 600 score to 660+ within 60–90 days, with continued improvement over the following 12 months.