Your credit score can influence everything from getting approved for a loan to the interest rate you pay. But how exactly is it calculated, and what can you do to improve it?

What Is a Credit Score?

A credit score is a three-digit number that lenders use to assess your creditworthiness. Scores typically range from 300 to 850 — the higher, the better.

Key Factors That Affect Your Score

1. Payment History (35%)
   Always pay your bills on time — late payments hurt your score the most.
2. Credit Utilization (30%)
   Keep your credit card balances low. Try not to use more than 30% of your available credit.
3. Length of Credit History (15%)
   The longer your accounts have been active, the better.
4. New Credit (10%)
   Opening many new accounts at once can signal risk.
5. Credit Mix (10%)
   A mix of credit cards, loans, and retail accounts can help your score.

Quick Tips to Boost Your Score

• Pay all bills on time
• Keep old credit cards open
• Reduce outstanding debt
• Limit hard inquiries

Conclusion:
Understanding your credit score is the first step toward improving it. Make smart choices, and your score will rise over time.