Want to boost your credit score? Join the waitlist for a new Cushion offering coming soon!

Overhead photograph of cup of coffee and credit score

What Makes Up a Credit Score?

Brooke Vaughan // July 22, 2021

A good credit score can open a lot of doors. It can make it easier to get a personal loan, buy a car, secure good interest rates on credit cards, and more. On the flip side, a bad credit score can produce a lot of personal and financial issues.

The first step of improving your score is understanding what factors into it so that you can take the necessary steps to manage your finances, debts, and bills effectively. 

What Is a Credit Score?

A credit score is a numerical representation of your creditworthiness and how likely you are to repay borrowed money. It is largely based on the marks, both positive and negative, in your credit report. Your credit score is especially valuable to financial institutions and other lenders when they are deciding whether or not to approve you for a loan, credit card, or other financial assistance.

There are many different scoring models, but FICO is the most popular. FICO scores range from 300–850 and are used by about 90% of financial institutions and lenders to determine your competence with finances. In general, a higher credit score indicates that you are more trustworthy with credit from lenders.

When calculating your score, credit scoring agencies use the information in your credit reports from three notable reporting companies: Equifax, Experian, and TransUnion.

There are five factors that affect your credit score: payment history, credit utilization, credit history length, credit mix, and new credit.
Source: FICO

What Affects Your Credit Score?

For the FICO scoring system, there are five things that factor into your credit score: payment history, credit utilization, credit history length, credit mix, and new credit.

Payment history

Accounts for 35% of your credit score

How reliable are you with paying bills and debts by their due dates? If you pay your bills on time or early, your payment history will positively impact your credit score.

If you miss a credit card payment and your credit card issuer reports it to the credit reporting agencies, you will receive a negative mark on your credit report, which will cause your score to go down.

If you are not able to pay a bill or credit card balance in full, at least make the minimum payment. A minimum payment is better than no payment at all. A missed payment could land you a late fee and get reported to the credit reporting agencies, causing your credit score to drop.

💡 CUSHION TIP

Credit utilization

Accounts for 30% of your credit score

What percentage of your total credit are you using? Popular credit scoring agencies recommend that you keep your credit utilization below 30%. For a card with a credit limit of $1,000, your maximum credit card balance should only ever be about $300.

The closer that you are able to keep this ratio, the more positively your credit utilization will impact your score.

To decrease your credit utilization, you can request a higher limit on your current credit cards without increasing your spending, or try to decrease the amount that you charge to your credit card.

💡 CUSHION TIP

Credit history length

Accounts for 15% of your credit score

How long have you had credit? The longer that you’ve been building your credit portfolio, the more credit history length will positively impact your score.

It not only matters how long you’ve had available credit but also how active you’ve been on those accounts. For instance, if you opened a new credit card account 20 years ago but haven’t used the card in a decade, this will not exactly give your credit score a boost. Financial institutions and lenders want to see that you’re using and repaying your credit; if you’re not using it at all, they cannot accurately assess your creditworthiness.

Credit history length can play a part in deciding whether or not you want to close an account. As long as it doesn’t negatively impact your financial situation, you should consider leaving open older accounts rather than applying for new ones to show lenders the longevity of your credit history.

💡 CUSHION TIP

Credit mix

Accounts for 10% of your credit score

How many different types of accounts are in your portfolio? The more diverse your portfolio is, the more positively your credit mix will impact your credit score.

Credit can be divided into two prominent categories: revolving credit and installment loans.

  • Revolving credit: A type of credit that does not have a fixed payment schedule. You can use the credit as needed, pay off your balance, and continue to reuse the credit (e.g. credit cards)
  • Installment loans: A type of credit or loan that is repaid over a period of time in scheduled payments (e.g. mortgage, car loan, personal loan)

Different types of credit carry varying degrees of risk. Diversifying your portfolio should be done intentionally and not for the sake of boosting your credit score.

💡 CUSHION TIP

New credit

Accounts for 10% of your credit score

How much credit has been opened or attempted to be opened recently? New credit can cause your score to dip slightly. Things that qualify as new credit include:

  • Opening a new credit card
  • Taking out a loan
  • Hard inquiries by financial institutions or lenders before making a lending decision

Although new credit can hurt your credit score, the dip is usually small and short-lived. You should try to avoid opening new accounts or taking out loans regularly, but new credit can also allow you to diversify your portfolio or improve your credit utilization in the longer term.

💡 CUSHION TIP

Other Credit Scoring Models

There are a number of scoring models, and some may take a slightly different approach to calculating your credit score.

VantageScore, another popular type of credit score, develops your score slightly differently from FICO. Rather than giving each area a percentage, VantageScore calculates it based on how influential different aspects of your credit landscape are.

In this model:

  • Total credit usage, balance, and available credit: Extremely influential
  • Credit mix and experience: Highly influential
  • Payment history: Moderately influential
  • Age of credit history: Less influential
  • New account opened: Less influential


The most recent version of the VantageScore model uses the same 300-to-850 scoring system as FICO scores; however, by ranking the different factors from less influential to extremely influential, Vantage has a different method of finding that number.

What Doesn’t Affect a Credit Score?

Only credit-related information, predominantly found on your credit report, is used to calculate a credit score. Your score excludes personal information, such as:

  • Age
  • Race
  • Address
  • Ethnicity
  • Disabilities
  • Employment
  • Marital status
  • Religious or political affiliations
  • Income, or if you receive compensation of any other kind

Cushion helps you waste less money, save more, and live a financially healthier life. We monitor your bank and credit card accounts 24/7, find and alert you about pesky fees, let you know which fees are negotiable, which banks are cooperative, and can even automatically negotiate on your behalf.* To date, Cushion has secured customers more than $11 million in bank and credit card fee refunds—and we’re just getting started.

*Cushion only negotiates fees with high refund odds. We cannot guarantee any negotiations, a regular frequency of negotiations, or fee refunds—your bank makes the final call.

Want to boost your credit score? Join the waitlist for a new Cushion offering coming soon!