What Is a Credit Score, and How Can You Raise It?

A credit score is a number lenders use to estimate how likely you are to repay borrowed money. A higher score can mean easier approvals and lower interest rates on loans, credit cards and sometimes even rentals or insurance. How scores work varies by country; this guide uses the widely used FICO model from the United States as an example, but the habits that help are similar almost everywhere.

How the score is built

FICO scores range from 300 to 850. FICO publishes the approximate weight of each factor:

Payment history (about 35%): whether you pay on time. Late payments hurt the most.
Amounts owed (about 30%): especially how much of your available credit card limit you are using, called credit utilization.
Length of credit history (about 15%): how long your accounts have been open.
New credit (about 10%): recent applications and newly opened accounts.
Credit mix (about 10%): having different types of credit, such as cards and installment loans.

Habits that raise your score

Never miss a payment. Set up automatic payments for at least the minimum on every account, then pay more manually when you can.
Keep utilization low. A common guideline is to use less than 30% of your available credit, and lower is generally better. Paying your card before the statement closes can lower the balance that gets reported.
Keep old accounts open. Closing your oldest card can shorten your history and reduce your available credit. If it has no annual fee, consider keeping it with a small recurring charge on autopay.
Apply for new credit sparingly. Each application can cause a small, temporary dip.
Check your reports for errors. In the United States you can get free credit reports from each of the three major bureaus at AnnualCreditReport.com. Dispute any mistakes you find.

How long improvement takes

Lowering your utilization can help within a month or two, as soon as new balances are reported. Recovering from late payments takes longer, since negative marks can stay on a report for years, although their impact fades over time. The best strategy is consistent, boring good habits.

Credit scores and debt payoff

Paying down credit card balances helps twice: it lowers the interest you pay and it reduces your utilization. Our debt payoff calculator shows how fast you could clear your cards with an extra monthly payment.

Frequently asked questions

Does checking my own score lower it?

No. Checking your own score or report is a soft inquiry and does not affect it. Hard inquiries happen when you apply for new credit.

Do I need to carry a balance to build credit?

No. Paying your statement balance in full every month builds credit just as well and avoids interest entirely.

What is a good score?

On the FICO scale, scores in the 670 to 739 range are often described as good, and 740 and above as very good or excellent. Lenders set their own thresholds, though.