A credit score is a three-digit number that represents your creditworthiness—how likely you are to repay borrowed money. Lenders use your score to decide whether to approve you for credit cards, loans, and mortgages, and what interest rate to charge you.

The most common scoring model is the FICO score, used by about 90% of lenders. Another model is VantageScore, created by the three major credit bureaus. Both range from 300 to 850.

Your credit score is calculated using information from your credit report, which lists all your credit accounts, payment history, and any negative marks like late payments or collections.

• Payment history: 35% of your score—most important factor
• Credit utilization: 30%—how much of your available credit you're using
• Length of credit history: 15%—how long you've had credit
• New credit: 10%—recent applications and new accounts
• Credit mix: 10%—variety of credit types (cards, loans, etc.)

The three major credit bureaus—Equifax, Experian, and TransUnion—collect information about your credit behavior from banks, credit card companies, and other lenders. They create credit reports based on this data.

Your credit score is calculated from your credit report. Different lenders may see slightly different scores because not all creditors report to all three bureaus, and there are different versions of scoring models.

Your score updates regularly as new information is reported, usually monthly. Major positive actions (like paying down debt) and negative actions (like missing payments) will cause your score to change.

Checking your own credit does not hurt your score—that's a soft inquiry. Only hard inquiries, when lenders check your credit for lending decisions, can temporarily lower your score by a few points.

The most important habit for good credit is paying all bills on time, every time. Even one 30-day late payment can significantly hurt your score.

Keep your credit card balances low relative to your limits. Using less than 30% of your available credit is good; under 10% is excellent. Pay off balances in full each month if possible.

If you're new to credit, start with a secured credit card (requires a deposit) or become an authorized user on someone else's account. Build history gradually—it takes at least six months to generate a credit score.

• Set up automatic payments to avoid missing due dates
• Don't close old credit cards unless necessary—they help your credit age
• Avoid applying for too many new accounts at once
• Check your credit reports annually for errors at AnnualCreditReport.com
• Be patient—building excellent credit takes several years of consistent good behavior