How Your Credit Score Works (and How to Raise It)
Your credit score decides what you pay to borrow — sometimes tens of thousands over a mortgage. Here's what actually moves it, and how to raise yours.
Your credit score is a single number lenders use to decide whether to lend to you and at what rate. The gap between "fair" and "excellent" can mean tens of thousands of dollars over the life of a mortgage. The good news: the levers are simple and mostly in your control.
What the score is made of
Most scores weigh five things, roughly in this order of impact:
- Payment history (~35%) — do you pay on time?
- Amounts owed (~30%) — how much of your available credit you're using.
- Length of history (~15%) — older accounts help.
- New credit (~10%) — many recent applications ding you.
- Credit mix (~10%) — a blend of loan types.
The two that move it fastest
- Pay every bill on time. A single 30-day late mark can drop a good score sharply. Automate at least the minimums so a payment never slips.
- Keep utilization low. Aim to use under 30% — ideally under 10% — of each card's limit. Paying the balance before the statement closes can lower reported utilization fast.
Habits that compound
- Don't close your oldest card; length of history matters.
- Apply for new credit sparingly.
- Check your reports for errors — you're entitled to free copies — and dispute any mistakes.
Be patient
Scores reward consistency over time, not tricks. Months of on-time payments and low balances do more than any "hack." A strong score is really just financial health showing up as a number — track the rest with the free Financial Health Score.
Want the full system?
Build Real Wealth turns these ideas into a step-by-step plan, with interactive tools and a clear path from where you are to where you want to be.