What Factors Determine Your Credit Score?

June 1, 2018

We’re reminded daily that our credit score is important, but what factors determine your score? What steps raise, or lower, your score? While the exact formulas aren’t shared by the credit reporting agencies, the factors that are used to determine your score include:

1. Payment History. 

The most important factor in determining your credit score is your record of paying on existing debt. The more payments you’ve made on time, the more it will boost your score. Making a late payment can lower your score, and the later the payment, the more it hurts. (Credit reports show payments that are made 30, 60, and 90 days late. A payment made 90 days late will lower your score more than one made 30 days late.)

2. Credit Card Utilization. 

The amount of money you’ve borrowed, as a percentage of the amount of money you’ve been approved to borrow, is your credit utilization. For example, if you have one credit card with a limit of $10,000 and owe $5,000, your credit utilization is 50%. If you have the same $10,000 card and owe $1,000, your credit utilization is 10%. Your goal should be to have no more than 30% utilization.

3. Years of Credit. 

The longer your credit history, the more confidence lenders have in judging your ability to pay additional debt. Unfortunately, this is the hardest issue to address and “dings” those with a short credit history.

4. Types of Credit. 

Lenders like to see a variety of credit experiences, so having installment loans (i.e. car loan) in addition to credit cards works to your advantage.

5. Public Records. 

This potentially includes items of public record such as bankruptcy, tax liens, or civil judgments.

So what is a good credit score?

Credit scores can range from 300 – 850. As a general rule, lenders consider:

800 – 850 Exceptional

740 – 799 Very Good

670 – 739 Good

580 – 669 Fair

350 – 579 Very Poor

How can I find my score?

You’re entitled to one free copy of your credit report each year from In addition, many companies offer credit monitoring services. Some monitoring services charge a monthly fee, while others are free to use. (Though you can expect advertising targeted to you based on your score.)

The views, information, or opinions expressed in this article are solely those of the author and do not necessarily represent the views of Citizens State Bank and its affiliates, and Citizens State Bank is not responsible for and does not verify the accuracy of any information contained in this article or items hyperlinked within. This is for informational purposes and is no way intended to provide legal advice.