Five Factors of Your Credit Score

Your credit score is built from five factors, each weighted differently. Understanding these factors helps you make decisions that protect your score while paying off debt.

Payment History (35%)

The single most important factor. Even one late payment can drop your score 50-100+ points. When dealing with credit card debt, always make at least the minimum payment on time. If you can't afford the minimum, call the issuer and negotiate a hardship plan before the due date. A late payment stays on your credit report for 7 years.

Credit Utilization (30%)

How much of your available credit you're using. Lower is better. Consolidating credit card debt to a HELOC or personal loan can dramatically improve this factor because the HELOC doesn't count as revolving credit utilization. Paying off $20,000 in credit card debt through a HELOC can improve your score by 30-50 points on utilization alone.

Length of Credit History (15%)

The average age of your accounts matters. This is why you should keep old credit card accounts open after paying them off, even if you're not using them. Closing your oldest card reduces your average account age and can lower your score.

Credit Mix (10%) and New Credit (10%)

Having a mix of credit types (revolving credit, installment loans, mortgage) helps your score. Adding a HELOC to a portfolio of credit cards actually improves your credit mix. New credit inquiries cause a temporary 5-10 point dip that recovers within a few months. When shopping for a HELOC, multiple inquiries within a 14-day window count as one inquiry.