What Affects Your Credit Score?

Your credit score reflects how you've managed borrowed money over time. Five key factors determine this three-digit number: payment history, credit utilization, length of credit history, credit mix, and new credit inquiries. Understanding these elements helps you make smarter financial decisions, whether you're planning a major purchase or simply want to improve your borrowing power.

How Credit Scores Are Calculated

Payment history carries the most weight at 35% of your score. Lenders want to see you pay bills on time, every time. Even one missed payment can ding your score for months.

Credit utilization comes second at 30%. This measures how much of your available credit you're actually using. Keep balances below 30% of your limits. Ideally under 10%.

The remaining factors matter less but still count. Older accounts boost your score by showing lenders you've successfully managed credit over time. Having different types of credit (credit cards, auto loans, mortgages) demonstrates you can handle various payment structures.

Daily Habits That Move Your Score

Small actions add up over time. Pay your credit card bill a few days early instead of on the due date. This gives your payment time to process and shows up on your credit report faster.

Avoid these common mistakes. Don't close your oldest credit card unless it has an annual fee you can't justify. Each closed account shortens your average account age. Multiple credit applications within a few weeks signal desperation to lenders and can temporarily lower your score.

Why Timing Matters

Recent activity weighs more heavily than past problems. A late payment from last month hurts more than one from three years ago. Most negative information falls off your credit report after seven years, though some items, like bankruptcies, can linger longer.

When you're ready to buy a home, your score determines more than just approval. It sets your interest rate, which can mean thousands of dollars in savings over the life of your loan. Purchase Your Home offers mortgage solutions that may add positive payment history to your credit profile.

Put Your Knowledge to Work

A strong credit score opens doors. Better scores typically mean lower interest rates on auto loans, mortgages, and credit cards. Over time, this can save you thousands of dollars.

Start with one or two changes. Set up automatic payments. Pay down your highest balance credit card. These small steps can improve your score within a few months and set you up for better borrowing opportunities down the road.

Frequently Asked Questions

How can I achieve a high credit score quickly?

Building a high credit score, such as an 800, typically requires consistent positive financial habits over an extended period, not just a few weeks. Focus on making all payments on time, keeping credit card balances low, and maintaining older accounts. These actions contribute to gradual credit score improvement.

What actions are most damaging to a credit score?

The most damaging action to a credit score is missing or making late payments, as payment history accounts for 35% of your score. High credit utilization, meaning using a large percentage of your available credit limit, also significantly lowers your score. These factors can cause long-lasting negative effects.

Is a 700 credit score considered good?

Yes, a 700 credit score is generally considered a good score, reflecting responsible credit management. This score often helps you qualify for better loan options and more favorable rates and terms. Lenders frequently use scores in this range to assess a borrower's reliability.

What typically causes a credit score to decrease?

A credit score can decrease due to several factors, primarily late or missed payments and high credit card balances that raise your credit utilization. Other contributing factors include closing older credit accounts, which shortens your credit history, and applying for too much new credit in a short timeframe. Consistent negative activity can lead to a lower score.

What credit score is needed to buy a house?

There isn't a universal minimum credit score required to buy a house, as requirements can vary by lender and loan type. However, a stronger credit score can help you access more favorable mortgage rates and terms. Broadview Federal Credit Union offers mortgage solutions through Purchase Your Home to support homeownership plans.

^{Last reviewed: July 14, 2026 by the Broadview Team}