Understanding credit scores
This is factual, educational content designed to help you understand how credit scoring works — not personalized credit advice. Elevate Meridian is not a credit counseling agency or financial advisor; for guidance specific to your situation, consult a qualified professional. This lesson breaks down the five FICO factors, debunks myths like “carrying a balance helps your score,” and shows a real example of how paying down utilization can improve your score within a single billing cycle.
What you’ll learn
- Identify the five factors that make up a credit score and their relative weight
- Explain which two factors have the fastest impact on score changes
- Debunk common credit score myths that lead to bad decisions
- Apply utilization-reduction tactics to improve a score quickly
Key takeaways
- Five factors make up your score: payment history (35%), utilization (30%), length of history (15%), credit mix (10%), new credit (10%)
- Payment history and utilization together are 65% of your score — and the two you can move fastest
- Carrying a balance month to month doesn’t help your score, it only costs interest
- Checking your own score doesn’t hurt it — that’s a soft inquiry
- Closing an old card can hurt your score by shortening your account age and raising utilization
Your credit scores resources
Dive deeper into understanding credit scores with our expertly crafted video lessons and practical tools. This embedded video provides a comprehensive overview of credit score basics, making complex concepts easy to understand. Plus, access downloadable spreadsheets and PDF forms to help you start credit scores effectively today. Remember, the one key takeaway from this page should be the importance of consistently tracking and planning your finances to achieve your goals.
"I can't say enough about the outstanding service I received from your company. Their team went above and beyond to meet our needs and exceeded our expectations."
Oliver Hartman