How Credit Scores Work: The Factors Behind the Number

A credit score is a number that predicts how likely you are to pay a loan back on time, calculated from the information in your credit reports, in the definition used by the US Consumer Financial Protection Bureau (CFPB).¹ How credit scores work comes down to what the scoring formula reads in those reports and how much weight it gives each part. FICO says payment history makes up about 35 percent of its scores for the general population in the US, the largest of its five categories.²

That weighting shows what the formula rewards most: paying every account on time, then keeping balances low against your limits. The weights, the scale and even who calculates the number differ by model and by country. Interest and repayment belong to a separate question, covered in how debt works, from the principal you borrow to the interest it costs.

How credit scores work, and what they never see

A credit score is a forecast, not a grade: most US scores run from 300 to 850, and a higher one generally makes it easier to qualify for a loan and may bring a better interest rate, the CFPB says.¹

What a score predicts is specific. The UK’s Financial Conduct Authority (FCA) says a credit score typically reflects a credit agency’s estimate of the chance that the account applied for will go bad within a set period.³

FICO says its scores use only the information in your credit report, so your salary, job title, employer and address are not in the number. It adds that US law bars scoring from considering race, color, religion, national origin, sex, marital status or receipt of public assistance.⁴

An illustrative case: two applicants earn the same salary. One has repaid a car loan on time for years; the other always pays cash. To a scoring model, only the first has evidence. A score measures a track record of repaying borrowed money, not wealth.

So the way to move a score is to change what goes into the report, above all how you repay. A pay rise or a bigger savings balance does not reach the number directly.

Five weighted factors: what FICO counts, and why

FICO groups the data in a US credit report into five categories and publishes how much each typically matters. The weights describe the general population; FICO says they can differ for a particular person, for example someone who has not been using credit for long.

The order follows what a lender most wants to know. Payment history comes first because, in FICO’s words, whether you have paid past accounts on time is the first thing any lender asks. Amounts owed come next because using a lot of your available credit may suggest you are overextended. Length of history rewards time, though FICO says a long history is not required for a good score. New credit counts because, FICO says, opening several accounts in a short period represents greater risk, especially for people without a long history. Credit mix counts least, and FICO says there is no need to have one of each type. And because the evaluation changes as the information in your report changes, a lower balance counts once it is reported.²

Myth

Checking your own credit score lowers it.

Fact

FICO does not count requests you make to see your own report, nor lenders' promotional checks for pre-approved offers or reviews of accounts you already hold.

Take an illustrative borrower with one late payment two years ago and a card usually close to its limit. The late payment is already history; the card balance is not, and it is the part this borrower can change next month. In FICO’s own weighting, the two biggest levers are paying every account on time and using a small share of the credit you have. Opening an account only to improve your mix works on the smallest factor.

VantageScore reads the same report with different emphasis

VantageScore, set up in 2006 by the three national credit bureaus, Experian, Equifax and TransUnion, ranks its factors by influence instead of publishing fixed percentages. For VantageScore 4.0, Experian, one of its owners, lists payment history as extremely influential, total credit usage and credit mix and experience as highly influential, new accounts as moderately influential, and balances and available credit as less influential.⁵

Two design choices matter more than the labels. First, VantageScore 4.0 uses trended data, looking at how your credit use has changed over the past 24 months, such as how often you paid more than a card’s minimum. Second, it needs less history: according to Experian, one account, collection or bankruptcy on your report is enough, with no minimum age and no need for recent activity. Both brands are also families: Experian counts more than 40 versions of the FICO score.⁵ FICO says its own score needs an account open for at least six months and an account reported to a bureau within the past six months, so someone whose only card was opened three months ago may have a VantageScore but no FICO score.⁶

When a website shows “your score”, look for the model and version printed beside it. A VantageScore and a FICO score on the same scale are still different calculations.

Why the number in your app may not be the one a lender sees

You do not have just one credit score: the CFPB says each score depends on the scoring model, the source of the data and even the day it was calculated.¹ A 2012 CFPB study of 200,000 credit files from each of the three national bureaus compared scores sold to consumers with scores sold to lenders. Most people landed in the same broad credit-quality band under each model, but between about a fifth and a quarter would get a meaningfully different impression of their standing from the one a lender would see.⁷

The study is old, but its advice holds: the CFPB said consumers should not rely on a score they buy as the only basis for judging their creditworthiness before an important credit decision.⁷ The score is also one input among several. Lenders look at your income, your debt-to-income ratio and your history with them as well, Experian notes, so a good score does not guarantee approval.⁵

1. Credit report: the records lenders and others send to a credit bureau: payments, balances, limits, account ages, applications
2. Scoring model: a formula that weighs those records; FICO, VantageScore and each UK agency use their own
3. Score: a prediction of how likely you are to repay on time, on that model’s scale
4. Lender’s decision: the score or the raw report data, plus your application (such as income) and the lender’s own records

An illustration: a free app shows a score in its top band, so you expect a mortgage lender’s best rate. The lender uses a different model on a different bureau’s file and places you one band lower. Nothing went wrong; two formulas read two slightly different records. The useful habit is to treat a free score as a direction of travel and to ask the lender which score it will pull.

In the UK, there is no single score and no single scale

In the UK there is no universal credit score, Equifax UK says: each credit reference agency and lender that scores you uses its own formula and its own scale, so the same information can give a 700 on one scale and a 500 on another.⁸

The scales are the agencies’ own choice. Experian began moving its UK score from a top of 999 to a top of 1,250 in autumn 2025, and says it looks at more information, such as rent and how you manage an overdraft.⁹ Citizens Advice adds that different lenders use different systems to score you, so a refusal from one does not mean a refusal from all, and that lenders will not tell you your score, though they must name the agency they used if you ask.¹⁰

The FCA’s credit information market study shows why the agency number is only a guide. Many lenders use the raw or summarized data from the agencies, together with what applicants tell them, while others lean more on agency scores. The FCA compared broadly similar scores for about 50,000 people known to all three large agencies, Experian, Equifax and TransUnion. Depending on which two agencies it paired, between about a third and more than half of people sat two or more deciles apart in the two rankings, a gap the FCA calls material. It traced the gaps to differences in the data each agency holds, partly because some lenders do not share data with all three, and to different ways of modeling risk.³

As an illustration, an account reported to only one agency builds your history there and nowhere else. That is why it pays to read your report at all three agencies, not just one. The FCA found in 2023 that close to half of consumers did not know they could request a free statutory credit report from the agencies.¹¹ Outside the US and UK, credit reporting works differently again; your own financial regulator is the place to check how.

Millions of US adults have no credit score at all

Not everyone can be scored. The CFPB’s latest estimate, a June 2025 correction of a widely quoted 2015 figure, finds that fewer US adults have no credit record than once thought, and that more have a record too thin or too stale for a standard model to score.

The study

Moderate evidence

Kambara and Luce recount the US adults a standard model cannot score (CFPB, 2025)

In December 2020, an estimated 2.7 percent of US adults, about 7 million people, had no credit record at all (the CFPB calls them credit invisible), and a further 9.8 percent had a record that a commercial scoring model could not score because it was stale or held too little information. The correction cut the 2010 estimate of credit invisibles from 11.0 to 5.8 percent, after the CFPB found its original data had left out records holding only deferred student loans, collections or closed accounts.¹²

The bigger point is the split: having a file that a standard model will not score is more common than having no file at all. The caveats are that the estimate rests on one bureau’s records and one model’s definition of “scorable”, that the CFPB says other models might score some of these files, and that, as of the June 2025 report, it had not yet published updated breakdowns by consumer group or location.¹²

Illustrations include someone who closed their last card years ago or a newcomer whose credit history stayed in another country. If a lender says it cannot score you, the two unscored groups in the CFPB’s estimate point to the likely gap, a file that is stale or one that is thin, which is a different problem from a record of missed payments.

Where to check your records, and when to get free help

Most credit-score problems start in the report, and checking it is free. US readers can see the report held by each of the three nationwide bureaus free once a week at AnnualCreditReport.com, the Federal Trade Commission said in June 2026, and a federal law, the Fair Credit Reporting Act, requires the bureaus to let you dispute mistakes.¹³ In the UK, Citizens Advice says a credit reference agency must give you your statutory credit report free if you ask.¹⁰

• Now: if money worries bring thoughts of suicide or self-harm, US readers can call or text 988, or call 911 if a life is in danger, as the National Institute of Mental Health advises.¹⁴ In the UK, the NHS lists Samaritans on 116 123, NHS 111’s mental health option in England, and 999 or A&E if a life is at risk.¹⁵ Elsewhere, call your local emergency number.
• Soon, within days: if a report shows an account you do not recognize or a payment wrongly marked as late, dispute it with the bureau or agency that holds it.
• Within weeks: if a low score reflects debts you are struggling to repay, talk to a free adviser. American credit counselors are mostly non-profit and offer advice at little or no cost, the CFPB explains, though some charge for certain services, and the FTC has found debt management plan providers that defrauded people; the CFPB’s advice is to ask for a specific price in writing.¹⁶ UK readers can find free debt advice services through MoneyHelper, which GOV.UK lists.¹⁷ Elsewhere, a free non-profit adviser or your own financial regulator is the place to start.
• Before a major application, such as a mortgage: look at all three reports, not one score, and ask the lender which bureau and model it uses. A regulated adviser can help with choices that hinge on your personal circumstances.

The bottom line

A credit score is a prediction read off your credit report, and every model reads that report a little differently. In FICO’s published weighting, paying on time and keeping balances low against your limits matter most. In the UK the agencies’ reports matter more than any one agency’s number, and in the US millions of adults have files too thin or stale to score. Check the records at every bureau, because a score can only be as accurate as the file it reads.