How Credit Scores Work

FICO Score and VantageScore are the two dominant credit scoring models in the U.S. Both range roughly from 300–850 and weigh similar factors, though their exact formulas differ slightly.

• Payment history (~35%) — on-time vs. late payments
• Credit utilization (~30%) — how much of your available credit you're using
• Length of credit history (~15%) — how long your accounts have been open
• New credit (~10%) — recent applications and inquiries
• Credit mix (~10%) — variety of account types (cards, loans, mortgages)

Income, employment status, age, and checking your own credit report do not directly affect your score. Soft inquiries (like checking your own score) don't lower it.

A single late payment can drop your score quickly, especially from a high starting point, but rebuilding typically requires months of consistent on-time payments and low utilization.

Settlement primarily impacts the payment history factor (missed payments) and can affect utilization while balances remain unpaid. Once accounts are resolved, both factors can begin improving again.

Focus on the two biggest levers: paying everything on time, and keeping utilization low. These two factors alone account for roughly two-thirds of most credit scores.