How credit scores are actually calculated
The five factors, their real weights, and why two people with the same income can be 200 points apart.
§ 1The five factors and their real weights
A FICO score runs from 300 to 850 and is built from five factors: payment history (about 35%), amounts owed (about 30%), length of credit history (about 15%), new credit (about 10%), and credit mix (about 10%). Every point your score moves traces back to one of these five inputs — nothing else.
Notice what is not on the list: your income, your job title, your savings balance, your education, your rent (unless it is being reported by a rent-reporting service). This is why two people earning the same salary can sit 200 points apart. The score doesn't measure how much money you make; it measures how you have handled the credit you were given.
§ 2Payment history: the 35% you can't argue with
One payment reported 30 days late can drop a strong score by 60–100 points, and the higher your score was, the harder it falls. Late payments are tiered — 30, 60, 90, 120+ days — and each tier does more damage. A late payment can legally stay on your report for up to seven years, though its effect fades with time.
Two practical rules follow. First, if you can only make the minimum payment, make it — a minimum payment on time is a perfect month as far as the score is concerned. Second, if you are ever about to go 30 days late, call the lender before it happens. Many will work out a payment arrangement rather than report you, but almost none will remove an accurate late mark after the fact.
§ 3Utilization: the 30% you can move fastest
Amounts owed is mostly credit utilization — your balances divided by your limits, measured both per card and across all cards. A $2,000 balance on a $10,000 limit is 20% utilization. Scores respond best below 30%, noticeably better below 10%, and a single maxed-out card hurts even when your overall utilization is low.
Here is the detail most people miss: the balance that gets scored is usually the balance on the day your statement closes, which the card issuer then reports to the bureaus. You can pay in full every month and still look maxed out if you charge heavily and the statement snapshots a high balance. Paying down a card a few days before the statement closing date is the single fastest legitimate score improvement available — it can show up in 30 days.
§ 4Age, new credit, and mix: the slow 35%
Length of history looks at the age of your oldest account, your newest, and the average across all of them. This is why closing your oldest credit card is usually a mistake — a closed account eventually stops aging in your favor, and you cannot buy back time. If an old card has no annual fee, the standard advice is to keep it open with a small recurring charge on it.
New credit counts recent applications (hard inquiries) and newly opened accounts. Each application stings a little; several in a short window sting more, because statistically they look like distress. Credit mix — having both revolving accounts like cards and installment accounts like an auto loan — is the smallest factor. Do not take out a loan you don't need to "improve your mix"; the interest will cost far more than the handful of points is worth.
§ 5Why there is no single "your score"
Each of the three bureaus — Experian, Equifax, and TransUnion — keeps its own file on you, and lenders don't all report to all three. On top of that, FICO has multiple versions in use (a mortgage lender may pull older versions than a card issuer), and VantageScore is a separate model entirely. It is completely normal for your three scores to differ by 20 points or more.
What matters is not chasing one number but keeping the underlying reports clean and the habits steady — because every scoring model reads from the same three reports. That is also why this firm works on reports, not scores: fix what the reports say, and every version of the score follows.
Want this applied to your actual reports?
The free review is Unit 01 of the same playbook: we pull all three bureau reports and show you exactly what’s disputable — before you decide anything.
This lesson is general education, not legal, tax, or financial advice for your specific situation. Laws vary by state and change over time; verify current rules or consult a qualified professional before acting.