December 11, 2025
Written by Catherine Hiles
Certified Financial Education Instructor®
Certified Financial Education Instructor®
Catherine Hiles, CFEI®, originally hails from the U.K. and currently resides in Ohio, where she writes about finance, parenting, pets, home improvement, and more. In her spare time, Catherine enjoys running, reading, and hanging out with her husband, two young children, and energetic dog.
The biggest factors affecting your credit score are your payment history and the amount of your available credit you use.
The length of your credit history, credit mix, and number of new credit accounts have a smaller, yet real, impact on your credit score.
Factors like your income, your bank balances, and checking your own score won't impact your credit score.
Build or boost your credit score by making on-time payments, keeping your balances low, and only applying for new credit when necessary
Your credit score may be three simple numbers, but it can significantly impact your life.
Understanding what affects your credit score is the first step in your personal finance journey to build your credit. Here, we break down the main factors that influence your score and give you actionable steps to improve it.
When you're ready, you can start building credit1 with the secured Chime Visa® Credit Card– no credit check required.2
Your credit score is based on several key factors, each weighted differently in your overall FICO® Score. Understanding how these elements work can help you focus on what matters most when building credit.
Chime members can view their FICO Score for free in the Chime app. Here's a breakdown:
Factor | Percentage of FICO Score3 |
|---|---|
Payment history | 35% |
Amounts owed | 30% |
Length of credit history | 15% |
Credit mix | 10% |
New credit | 10% |
Your payment history makes up 35% of your FICO credit score, making it the most important factor that affects your credit score.3 Once a payment is 30 days late, the creditor will report it to the credit bureaus and decrease your credit score.4 Even one late payment can make a noticeable dent in your score.
One of the easiest things to do to improve your credit score is to pay your bills on time. If you have trouble remembering, take advantage of autopay or set up reminders. Your credit score will thank you.
The amount you owe in relation to your credit limit accounts for 30% of your FICO score.3 The higher your card balance, the higher your credit utilization ratio. This ratio compares your total outstanding balance to your total available limit across all your cards.
For example:
If your total credit balance is $500 and the maximum limit on all your credit cards combined is $5,000, your credit utilization ratio is 10%.
If you have $1,000 on your cards and a limit of $5,000, your credit utilization ratio is 20%
Keeping a low credit utilization ratio – ideally in the single digits – can help boost your credit score.
One way to establish credit as a beginner is with a secured credit card. This type of card is intended for those with no credit or poor credit. When you open an account, you'll make a security deposit that usually acts as your credit limit.
The limit on a secured credit card is usually much lower than that of an unsecured credit card, making it harder to run up a large balance. Using a secured credit card responsibly can help boost your credit score.
The length of your credit history accounts for 15% of your FICO credit score. A short history doesn't give lenders much insight into how well you manage debt, whereas a longer history gives them a clearer picture of your financial responsibility.
The credit bureaus measure this factor by looking at:
The age of your oldest and newest credit accounts
The average age of all your accounts
The time since you last used certain accounts
You can still have a good credit score even if your credit history is relatively short, as long as you pay your bills on time and keep your balances low.5
Credit mix makes up 10% of your FICO credit score. Lenders consider both installment loans (like mortgages and car loans) and revolving credit (like credit cards and other lines of credit). If you only have one type of credit, your score may be lower.
This factor is one of the least influential, so it's not vital to have a mix of credit cards, retail accounts, and loans. In fact, applying for credit you don't need may actually lower your score. But if you want to achieve an 850 credit score, it might be worth applying for other types of credit.6
New credit makes up approximately 10% of your FICO credit score.7 Applying for new credit can have a slightly negative impact on your credit score, though it's usually only by a few points.6
When you apply for a new credit card or loan, the lender will run a "hard inquiry." This is an official review of your credit history that can temporarily lower your score.
FICO considers inquiries from the last 12 months, but those inquiries will remain on your credit report for two years. That's why it's important to only apply for credit when necessary.
Although many factors affect your credit score, there are plenty that don't, including the following:
Rent and utility payments are usually not reported to credit bureaus, so they won't affect your score unless you or your landlord uses a rent reporting service.8
Income and bank balances are not reported to credit bureaus.
Checking your credit score is considered a soft inquiry and won't affect your score.
Getting prequalified for a loan or credit card doesn't affect your credit score because it uses a soft credit check.
Paying with a debit card uses money you already have for purchases and won't impact your credit score.
Denied credit card applications won't affect your credit score, though it might dip slightly when you initially apply.
Using credit counseling services won't factor into your credit score – and it can actually help you boost your score.9
Building credit takes time – it can take several months if you are starting out and potentially longer if you're rebuilding your credit after it's been damaged by bankruptcies or foreclosures.10
Understanding what affects your credit score is the first step toward building a stronger financial future. By focusing on the big things – like paying your bills on time and keeping your credit card balances low – you can make real progress. Remember, building good credit is a marathon, not a sprint. Every on-time payment and smart credit decision is a win worth celebrating!
To keep tabs on your progress, see our guide on how to check your credit score.
Hands down, the most damaging thing to your credit score is a late or missed payment. Since payment history makes up the largest part of your score,3 even a single payment that's 30 days late can cause a significant drop.4 Other damaging factors include high credit card balances and applying for too many new credit cards at once.
It depends on where you're starting from. If you're building credit from scratch, you might see a score in as little as a few months, while rebuilding damaged credit can take longer, depending on the severity of past issues.10
Besides late payments, a few other things can really bring your score down. Maxing out your credit cards hurts your credit utilization ratio and signals risk to lenders. Applying for a lot of new credit in a short time can also cause a temporary dip. Finally, having an account sent to collections is a major negative mark.4
Nope. Checking your own credit score is what's called a soft inquiry, which has zero impact on your score. It's actually a great habit to get into! The only time an inquiry can affect your score is when a lender checks it as part of a new credit application, which is called a hard inquiry. These can remain on your credit report for two years.11
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Opinions, advice, services, or other information or content expressed or contributed here by customers, users, or others, are those of the respective author(s) or contributor(s) and do not necessarily state or reflect those of The Bancorp Bank, N.A. and Stride Bank, N.A. (“Banks”). Banks are not responsible for the accuracy of any content provided by author(s) or contributor(s).
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To apply for Credit Builder, you must have an active Chime® Checking Account.
With qualifying direct deposits, earn 5% cash back as a Chime Prime member or 2% cash back as a Chime Plus member on up to $1,500 of eligible secured Chime Visa® Credit Card purchases. See the Secured Chime Visa® Credit Card - Cash Rewards Program Addendum for limitations and details on earning cash back on your monthly selected category.
Results will vary. Not all payments are boost-eligible. Some users may not receive an improved score or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost®. Learn more.
We’re partnering with Boom to help report rent payments made with your Chime account. Boom reports your rent payments to the credit bureaus. Late payments may negatively impact your credit scores. Impact on your credit may vary, as credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.
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Chime® is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC.