Understanding Credit

This is the most significant factor affecting your credit score. It reflects whether you've paid past credit accounts on time. Missed payments, bankruptcy, foreclosures, and other negative entries can significantly lower your score.

This refers to the ratio of your credit card balances to your credit limits. Keeping your credit utilization low (ideally under 30% of your limits) indicates to lenders that you manage credit well.

Generally, a longer credit history will increase your score. This factor takes into account the age of your oldest account, the age of your newest account, and the average age of all your accounts.

This involves the mix of credit accounts you have, such as credit cards, installment loans, finance company accounts, and mortgage loans. A diverse mix of credit types can positively affect your score.

Opening several new credit accounts in a short period of time can represent greater risk, especially for people who don't have a long credit history. This includes the number of recently opened accounts and the number of recent inquiries into your credit report.

In addition to these main factors, factors like the total amounts owed across all accounts, the presence of active and responsibly managed accounts, and the absence of bad credit events like bankruptcy or tax liens also play into the calculation of your score.