The basics
The most common score, the FICO score, runs from 300 to 850. Higher is better, and scores of about 740 and up are usually seen as very good. Your score is built from your credit report, which is kept by the three main credit bureaus: Equifax, Experian and TransUnion.
The five factors in a FICO score
Payment history (paying on time) is the biggest at about 35%. Amounts owed is about 30%, length of credit history about 15%, and new credit and credit mix about 10% each. Your income and bank balance are not part of the score.
What utilization means
Credit utilization is your balance divided by your credit limit, as a percent. Under 30% is a common target and under 10% is better. Try the simulator below. Card companies usually report your balance around the time your statement closes, so paying down before then lowers the number reported.
Soft vs. hard inquiries
Checking your own score is a “soft inquiry” and doesn’t hurt it. A “hard inquiry” happens when you apply for new credit and can lower your score a little for a while.
Late payments stick around
Lenders usually report a payment as late once it’s 30 or more days past due. It can stay on your report for up to 7 years, which is why many people use autopay for at least the minimum payment.
Check your reports for free
The official site for free reports from all three bureaus is AnnualCreditReport.com. If you find a mistake, you can dispute it with the bureau that reported it.