Credit Scores: What Actually Moves Them, and What Doesn't

What a credit score is

A credit score is a number that estimates how likely you are to pay back borrowed money on time. Lenders use it to decide whether to lend to you and at what price.

It's calculated from the information in your credit reports, which are kept by the three major credit bureaus: Equifax, Experian, and TransUnion. Those reports track your credit accounts, balances, payment history, and certain public records.

There isn't just one score. The two main scoring families are FICO and VantageScore, and each has multiple versions. Most use a range of 300 to 850. The same person can have several slightly different scores depending on which model and which bureau's data is used.

What the numbers mean

For FICO, scores from 670 to 739 are generally considered good, 740 to 799 very good, and 800 to 850 exceptional. VantageScore uses somewhat different cutoffs.

According to Experian data from September 2025, about 70% of U.S. consumers had a good FICO score or better, and the average FICO score was 713.

What actually moves your score

FICO publishes the general categories that go into its scores and roughly how much each matters. The weights vary by person, but the general picture looks like this:

1. Payment history, the biggest factor

Whether you pay on time is the single most important part of most credit scores. For FICO, it's about 35% of the score.

One late payment, especially 30 days or more late, can hurt your score and stay on your report for years. The effect fades over time, but it's much easier to avoid than to recover from.

What helps: Paying every bill on time, every time. Setting up autopay for at least the minimum payment on every account is one of the simplest things you can do to protect your credit.

2. Amounts owed, especially credit card balances

This is about how much you owe, particularly on credit cards compared to your credit limits. It's called credit utilization, and for FICO, amounts owed make up about 30% of the score.

Let's say you have a $10,000 total credit limit and a $7,000 balance. You're using 70% of your available credit, which tends to hurt your score. If your balance were $1,000, you'd be using 10%, which tends to help.

What helps: Keeping card balances low compared to your limits. Paying down balances before the statement closes, since that's usually the balance that gets reported. Many people aim to keep utilization well below 30%, and lower is generally better.

3. Length of credit history

The longer you've had credit, and the older your accounts are on average, the better. For FICO, this is about 15% of the score.

What helps: Keeping older accounts open, especially if they have no annual fee. This is one reason closing your oldest card can backfire.

4. New credit

Opening several new accounts in a short time can lower your score, at least temporarily. Each application for credit usually triggers a hard inquiry. For FICO, new credit is about 10% of the score.

What helps: Only applying for credit you actually need. When you shop for a mortgage or auto loan, multiple inquiries for the same type of loan within a short window are often treated as a single inquiry, so it's generally fine to compare lenders within a focused period.

5. Credit mix

Having a mix of credit types, like credit cards and installment loans, can help a little. For FICO, it's about 10% of the score.

What helps: Nothing you need to force. Opening a loan just to improve your mix isn't worth it.

In plain terms: pay on time, keep card balances low, keep old accounts open, and don't apply for a lot of new credit at once. That covers most of what matters.

What doesn't move your score

A lot of things people worry about don't affect their credit score at all.

• Checking your own score or report. That's a soft inquiry, and it doesn't hurt your score. Check as often as you like.
• Your income. Your salary isn't part of your credit report or score. Lenders may ask about income separately, but it doesn't change your score.
• Your bank account balances. Savings and checking balances aren't part of your credit score.
• Your age, race, religion, gender, or marital status. These can't be used in credit scoring.
• Where you live.
• Carrying a balance. You don't need to carry a balance or pay interest to build credit. Paying your full statement balance on time builds credit just as well, and saves you money.

Common myths, cleared up

"Closing a card will help my score." Usually not. Closing a card reduces your total available credit, which can raise your utilization. And closing an old card can eventually shorten your credit history.

"I should carry a small balance to build credit." No. This one costs people real money. Paying in full builds credit without interest.

"Paying off a collection removes it." Not always. How paid collections are treated depends on the scoring model. Newer FICO versions ignore paid third-party collections, but not every lender uses the newest models.

"All my scores should be the same." They won't be. Different models and different bureaus produce different numbers.

What changed in 2026

Credit scoring is going through some of its biggest changes in years.

New scores for mortgages

For decades, mortgages sold to Fannie Mae and Freddie Mac have used classic FICO scores. That's changing.

On September 9, 2026, Fannie Mae and Freddie Mac expanded the use of VantageScore 4.0 to all approved lenders. Lenders can now use either classic FICO or VantageScore 4.0 for eligible loans. Fannie Mae and Freddie Mac also published historical data for a newer FICO model, FICO 10T, in July 2026, with adoption expected at a later date.

VantageScore 4.0 considers some information classic FICO doesn't, like rent and utility payments. That could help some people with limited credit history qualify. According to a Zillow analysis of 2025 mortgage data, about a third of mortgage denials for primary home purchases with conventional loans were due to a lack of credit history.

What it means for you: if you're applying for a mortgage, it's worth asking your lender which score it uses. Your scores under different models may not be the same.

Buy now, pay later

Buy now, pay later plans, which let you split purchases into installments, are starting to appear on credit reports and can now affect some credit scores. On-time payments may help. Missed payments can hurt.

If you use these plans, treat them like any other loan. Make every payment on time, and be careful about stacking several at once.

Medical debt

A federal rule that would have removed most medical debt from credit reports was vacated by a court in 2025. But the three major credit bureaus have kept their own voluntary policies: paid medical collections don't appear on reports, and unpaid medical collections under $500 don't appear either.

Student loans

After a long pause, collections on defaulted federal student loans have been coming back, and missed payments can show up on credit reports. If you have federal student loans, especially if you were in the SAVE plan, staying current protects your credit as well as your wallet.

How your score affects what you pay

Lenders don't just approve or deny. They price. For many types of credit, including mortgages, auto loans, and credit cards, lenders sort borrowers into tiers based on credit scores and offer different rates to each tier.

That means two people buying the same house, with the same loan amount, on the same day, can be offered different interest rates because of their scores. On a 30-year mortgage, even a modest difference in rate adds up to a meaningful difference in total interest paid. The same goes for car loans, where borrowers with lower scores often pay significantly higher rates.

Your score can also affect things beyond loans, like whether you need a security deposit for utilities or a phone, what a landlord requires, and in many states, what you pay for auto and homeowners insurance.

In plain terms: a better score doesn't just get you approved. It makes borrowing cheaper, sometimes by a lot.

Helping your kids build credit

If you have teenagers or young adult children, helping them build credit early can give them a real head start.

A few common approaches:

• Add them as an authorized user. Adding a child to one of your cards can help them start a credit history, as long as you pay on time and keep the balance low. Your habits affect their report, so this works best when your credit is in good shape.
• Start with a secured card. Once they're old enough, a secured card lets them build their own history with limited risk.
• Teach the habits. Paying the full balance every month and never missing a payment are lessons that last a lifetime.
• Be careful co-signing. Co-signing for a child's loan makes you responsible for it, and it shows up on your credit.

Federal rules generally require credit card applicants under 21 to show independent income or have a co-signer, which is part of why many young adults start as authorized users.

How to check your credit

Get your free reports

You can get free copies of your credit reports from all three bureaus at AnnualCreditReport.com, the official site for free reports. Checking regularly is one of the best ways to catch errors and fraud early.

Read them carefully

Look for:

• Accounts you don't recognize
• Late payments you believe are wrong
• Incorrect balances or credit limits
• Accounts that should have been closed
• Personal information that isn't yours

Dispute errors

If you find an error, you have the right to dispute it with the credit bureau reporting it. Bureaus generally must investigate. It helps to include documentation and keep copies of everything you send.

Get your score

Many banks, credit card companies, and financial apps offer free credit scores. Just remember the score you see may not be the exact model a lender will use.

How to protect your credit

Freeze your credit

A credit freeze stops new creditors from accessing your credit report, which makes it much harder for someone to open accounts in your name. Freezing and unfreezing your credit is free at each of the three bureaus. You can temporarily lift a freeze when you apply for credit.

For many people, keeping credit frozen by default is one of the simplest ways to prevent identity theft.

Watch for fraud

Signs of identity theft include bills for accounts you didn't open, calls from debt collectors about debts that aren't yours, and unexpected changes to your credit report. If you suspect identity theft, the Federal Trade Commission's site, IdentityTheft.gov, walks you through recovery steps.

Be careful co-signing

When you co-sign a loan, it usually appears on your credit report, and any late payments can hurt your score. It also counts against you when you apply for your own credit.

Rebuilding credit

If your credit has taken hits, it can recover. It takes time, but the steps are clear.

1. Get current on everything. Bring any past-due accounts current and keep them there.
2. Set up autopay. Protect yourself from new late payments.
3. Pay down card balances. Lower utilization can help relatively quickly.
4. Keep old accounts open.
5. Consider a secured card if needed. You put down a deposit that acts as your credit limit, use it lightly, and pay it in full. Over time, it can help rebuild your history.
6. Be patient. Negative items fade in impact over time, and most eventually fall off your report.

Be cautious with companies promising to "fix" your credit for a fee. You can dispute errors yourself for free, and no one can legally remove accurate, timely negative information.

Credit at different stages of life

Early career. Building credit early makes renting, car loans, and eventually a mortgage easier and cheaper. On-time payments and low balances are what matter.

Buying a home. In the months before applying for a mortgage, avoid opening new accounts, keep card balances low, and check your reports for errors. Ask lenders which score they use.

Mid-career. Keep your credit strong for refinancing, helping kids with college, or unexpected needs.

Near and in retirement. Credit still matters. You may want to refinance, downsize, buy a new home, or finance a car. Keeping a few older cards open and in use, even lightly, can help maintain your history. Retirees are also frequent targets of identity theft, which makes a credit freeze especially worth considering.

What I'm not going to do

I'm not going to promise you a specific score or tell you exactly how many points any action will add. Scoring models are complex, and results vary.

What I will say is this. When it comes down to it, a strong credit score isn't built on tricks. It's built on a few boring habits done consistently: pay on time, keep balances low, and don't borrow more than you need.

Let's look at the bigger picture

Your credit score is one piece of your financial life. It affects what you pay to borrow, which affects how much you can save, invest, and eventually live on.

If you're planning to buy a home, refinance, pay down debt, or get your finances in order before retirement, I can help you see how the pieces fit together. We'll look at your debts, your savings, your goals, and your timeline, and build a plan that puts your money to work instead of paying more than you need to in interest.

I work as a fiduciary, which means I'm required to act in your best interest.

Good credit gives you options. A good plan tells you what to do with them.

Frequently asked questions

What is a good credit score?

For FICO, scores from 670 to 739 are generally considered good, 740 to 799 very good, and 800 to 850 exceptional. VantageScore uses somewhat different ranges.

Does checking my credit score lower it?

No. Checking your own score or report is a soft inquiry and doesn't affect your score.

What affects my credit score the most?

Payment history is typically the biggest factor, followed by amounts owed, especially credit card balances compared to your limits.

Do I need to carry a credit card balance to build credit?

No. Paying your full statement balance on time builds credit without paying interest.

Can mortgage lenders use VantageScore now?

Yes. As of September 9, 2026, all Fannie Mae and Freddie Mac approved lenders may use VantageScore 4.0 for eligible loans, in addition to classic FICO.

Does buy now, pay later affect my credit?

Buy now, pay later plans are starting to appear on credit reports and can affect some credit scores. On-time payments may help, and missed payments can hurt.

How do I freeze my credit?

Contact each of the three major credit bureaus, Equifax, Experian, and TransUnion. Freezing and unfreezing is free, and you can temporarily lift a freeze when applying for credit.

Educational content only. Not individualized investment, tax, legal, or credit advice. Benowitz Wealth Management is a brand of Joy Financial Group LLC, a Florida state-registered investment adviser.

Neither Joy Financial Group LLC nor Benowitz Wealth Management is affiliated with, endorsed by, or employed by the Florida Retirement System, the Florida Division of Retirement, the State Board of Administration of Florida, MyFRS, or any government agency. FRS members may obtain free, unbiased guidance from the MyFRS Financial Guidance Line at 1-866-446-9377.