The number that shapes your financial life — and how to move it in the right direction
Your credit score is a three-digit number — typically between 300 and 850 — that tells lenders how reliable you are with borrowed money. The higher it is, the better rates, cards, and loan terms you’ll qualify for. The lower it is, the more everything costs you.
The good news: your credit card, used correctly, is one of the fastest ways to build it.
What Makes Up Your Score
Your score is calculated from five factors. Two of them dominate everything else.
Payment History (35%) — The biggest factor by far. Pay on time, every time, and this works in your favor. Miss a payment and it can stay on your report for up to seven years.
Credit Utilization (30%) — How much of your available credit you’re using. If your limit is $1,000 and you’ve charged $600, your utilization is 60% — too high. Keep it under 30%, ideally under 10%, for the best impact.
Length of Credit History (15%) — How long your accounts have been open. This is why closing old cards is rarely a good idea.
Credit Mix (10%) — Having different types of credit helps slightly. Don’t stress this one early on.
New Credit (10%) — Every new application triggers a hard inquiry and temporarily dips your score. Apply sparingly.
How Your Card Affects It Daily
Every month your card issuer reports your balance and payment status to the three major credit bureaus — Equifax, Experian, and TransUnion. That report is what builds or damages your score over time.
Two habits cover 65% of your score on their own — pay on time and keep your balance low. Do those two things consistently and your score will climb steadily.
Simple Habits That Move the Needle
Pay on time, every month — Set autopay to the full statement balance and never think about it again.
Keep utilization low — Charge only what you can pay off. If your limit is $500, try not to carry more than $150 at any point.
Don’t close old accounts — Even if you stop using a card, keeping it open preserves your credit history length and available credit.
Check your report once a year — Errors are more common than people think. Dispute anything wrong at annualcreditreport.com.
What Score Should You Aim For?
| Score Range | Rating | What It Means |
|---|---|---|
| 300 – 579 | Poor | Rebuilding needed |
| 580 – 669 | Fair | Limited options, higher rates |
| 670 – 739 | Good | Most standard cards and loans available |
| 740 – 799 | Very Good | Better rates, more card options |
| 800 – 850 | Exceptional | Best rates, easiest approvals |
Most people with one card and consistent good habits reach the 700s within 12–18 months.
Bottom Line
Your credit score isn’t complicated — it rewards two things above all else: paying on time and not maxing out your card. Start there and everything else follows naturally.
For informational purposes only. Not financial advice. Always verify card terms directly with the issuer.