What actually moves your credit score (and what barely does)

There is a lot of advice about credit scores, and most of it is either too vague or about things that barely matter. The most widely used score, FICO, is built from five groups of information, and they don't count equally. Knowing which ones carry the weight tells you where to spend your effort.

The five factors and how much they count

Factor	Share	What it means
Payment history	35%	Whether you pay on time, and how late any missed payments were
Amounts owed	30%	Mostly how much of your card limits you're using
Length of credit history	15%	How old your accounts are, on average and the oldest one
New credit	10%	Recent applications and newly opened accounts
Credit mix	10%	Having different types, such as cards and installment loans

Two factors, paying on time and keeping balances low, make up about two-thirds of the score. That is where to start.

The fastest lever: card utilization

Utilization is the share of your credit card limits that you're using. If you have one card with a $1,000 limit and a $600 balance, your utilization is 60%. Lower is better: under 30% is a common rule of thumb, and people with the highest scores tend to stay under 10%.

What makes it powerful is that most scoring models only look at the balance on your latest report. Card issuers usually report the balance on your statement date, not on the payment due date. So:

• Pay before the statement closes. Paying down the card a few days before the statement date means a lower balance gets reported, even if you use the card normally.
• Spread balances out. Both overall utilization and the highest single card count. One maxed-out card can hurt even if your total is fine.
• Ask for a higher limit. A higher limit with the same balance lowers utilization, as long as you don't spend more.

Paying on time, with less effort

A payment usually gets reported as late once it is 30 days past due, and a late payment can stay on your report for up to seven years. A day or two late typically means a late fee, not a credit report mark, but it is not worth testing.

• Set up automatic payments for at least the minimum on every card and loan. You can always pay more by hand.
• If you're about to miss a payment, call the lender before the due date. Many will move the date or arrange something.

What barely matters

• Checking your own score or report. This is a soft inquiry and has no effect on your score.
• Carrying a balance to "build credit". You don't need to pay interest to build credit. Paying the full statement balance works just as well.
• Your income or bank balance. Neither is part of your credit report or score.
• A single application. A hard inquiry usually costs a few points at most and affects FICO scores for 12 months. Several applications in a short time add up, though.

What to avoid

• Closing your oldest card. You lose its limit, which raises utilization, and over time it can shorten your history. If there's no annual fee, keeping it open and using it lightly is usually better.
• Lots of new applications at once. Each one adds an inquiry and new accounts lower the average age of your credit.
• Letting an account go to collections. If you can't pay, talking to the lender early almost always leaves you with more options.

Check your reports for free

Your score is calculated from your credit reports, so errors in a report can cost you points. You can get free reports from all three bureaus, Equifax, Experian and TransUnion, every week at AnnualCreditReport.com, the official free source. If something is wrong, such as an account that isn't yours or a payment marked late that wasn't, you can dispute it with the bureau.