A credit score predicts how likely a borrower is to repay debt based on information in a credit report. It can influence loan approval, interest rates, credit limits and other decisions. There is no single universal score: lenders may use different models, data sources and versions for mortgages, auto loans and credit cards.

The factors that usually matter

The Consumer Financial Protection Bureau says scoring models commonly consider payment history, unpaid debt, the number and types of accounts, the age of accounts, use of available credit, recent applications and serious negative events such as collections or bankruptcy.

Paying bills on time has the greatest practical importance. Credit utilization—the share of available revolving credit currently used—also matters. Keeping balances well below card limits is generally safer than running close to the maximum, even when the bill is eventually paid.

What can lower a score

  • Late or missed payments reported to credit bureaus
  • High balances relative to credit limits
  • Several new credit applications in a short period
  • Closing accounts when it sharply raises overall utilization
  • Collections, foreclosure or bankruptcy

A hard inquiry made after an application can affect a score. A soft inquiry, including checking your own credit report, does not. Rate-shopping inquiries for the same kind of loan may be grouped when they occur within a limited window, depending on the scoring model.

Your report comes before your score

Scores are calculated from credit-report data. Review reports for accounts that are not yours, incorrect late payments, duplicate debts or closed accounts shown as open. The CFPB directs consumers to AnnualCreditReport.com for reports from the three nationwide credit bureaus. Dispute an error with both the credit bureau and the company that supplied the information.

How improvement happens

There is no instant repair method. Get current on missed payments, automate due-date reminders, reduce revolving balances and avoid unnecessary applications. Preserve older no-fee accounts when appropriate, but do not keep an account that creates fees or fraud risk solely for scoring purposes.

Bottom line

Focus on accurate reports, on-time payments, manageable balances and restrained applications. Those habits matter more than chasing a particular score from one app.