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What Affects Your Credit Score?

by: Emma Higgins

Update: 10/2019

Your credit score is one of the most important numbers in your life. Therefore, it’s no surprise that so many people want to know what affects their credit score. The truth is that your credit score is the result of a number of different factors.

Moreover, each of the major credit score factors is affected by several things. The amount of time an item has been on your report affects how much it influences your score. The type of item on your credit report affects how much it influences your score. That means there’s no easy answers for people wondering how much certain situations will affect their FICO score.

However, there are lots of question out there. That’s why we put together this helpful guide. We’ll list the five major factors that affect a person’s credit score. We’ll also explain what each factor means and how strongly it’s weighted into your credit score. After that, we’ll answer some of the most common questions that relate to that factor. Finally, we’ll cover some questions that are more complex.

What Affects Your Credit Score?

Use this information to make smart decisions about your credit and credit score. After all, your credit score determines lots of things in your life. Everything from approval for credit and loans to getting a job offer can be based on your score. That means every bit of knowledge can make your life better.

What Affects Credit Score?

There are five primary factors that affect your credit score. The length of your credit history, your credit mix, new credit, payment history, and credit utilization. We’ll look at each of these factors below.

Length of Credit History

One of the trickiest credit score factors is the length of your credit history. This is an area where people can sometimes get into trouble by accident. The longer your credit history, the better your score will be. That’s because a longer history gives creditors and lenders more confidence in their ability to assess how much of a risk a person is for default. The length of your credit history makes up 15% of your credit score.

Does Closing Credit Card Affect Credit Score?

Yes, this can affect your credit score in a few ways.

First, closing a credit card lowers your available credit. That means you’ll be utilizing a higher percentage of your credit. That causes your score to drop. Also, closing your credit card can shorten the length of your credit history. That’s because your credit score is calculated using the average age of open accounts. Closing an account removes it from that consideration, which can drop your score.

Does Closing a Bank Account Affect Credit Score?


A bank account isn’t based on credit. It isn’t the same as a credit card or loan. Instead of owing money to the bank account, your bank account stores money. Therefore, bank accounts aren’t reported on credit reports. As a result, closing them doesn’t affect your score.

Does Closing HELOC Affect Credit Score?


Closing a HELOC causes the average length of your credit history to go down. That means that your credit score can also take a hit. Therefore, you want to be sure it’s the right move to close your HELOC once you’re done paying it off. It can be smart to do so if your account charges annual fees. It’s also necessary to close the HELOC to remove the lien on your home, even if the balance owed on your HELOC is zero.

Credit Mix

Credit mix is a bit hard to understand. Essentially, this category evaluates the types of accounts that you have open and looks for a good mix of them. Specifically, it takes revolving accounts and installment accounts into consideration.

The best example of an installment account is a loan. You get a lump sum of money up front and then pay down the balance over the repayment period. Revolving accounts are things like credit cards. These are accounts that you can dip into when you need them and carry a different balance each month. The balance on a revolving account can go up or down, depending on how you use it.

Creditors like to see a good mix of these types of accounts. That shows them that you’re able to handle multiple different types of credit. It also shows that you’re using credit responsibly. Many installment accounts are things that add value, for example a mortgage. Whereas revolving accounts usually only represent debt with no value added.

Your credit mix makes up 10% of your credit score.

What Affects Your Credit Score?

Do Student Loans Affect Credit Score?

Yes, student loans can affect your credit score in many ways.

First, they’re an installment account. That means lenders see these accounts as a good investment that will increase your earning potential in the future. Therefore, they can contribute to having a good mix of credit.

However, student loans also show debt obligations. That can make it harder to get credit or loans in the future. Additionally, if you fall behind on your payments, then a student loan can hurt your account. Student lenders have to follow special credit reporting rules. That means they aren’t as flexible as other lenders when it comes to what they can report to the major credit agencies.

Do Personal Loans Affect Your Credit Score?

Yes, personal loans affect your credit score.

A personal loan can build up your credit score if you make all of your payments on time. However, taking out a personal loan also generates a hard credit inquiry, which will bring your score down a little bit.

Also, the way you use a personal loan matters. If you use the loan to consolidate credit card debt and then keep a low or zero balance on those cards, it can boost your score by lowering your utilization. However, using a personal loan for something like a vacation or event doesn’t help your credit score.

New Credit

New credit is a bit vague but is easy to understand. Any time someone requests new credit it sends a signal that they are a bigger risk than they had been in the past. That’s why things like credit checks affect your credit score. If someone starts applying for lots of new loans and lines of credit, it tells lenders and creditors that person is having money problems.

Additionally, new credit can play a role in affecting another factor. Specifically, your average account length. Anytime you add a new credit account to your credit history, your average account age goes down. That also causes a drop in your score.

New credit makes up 10% of your credit score total.


How to Pre-Qualify Credit Card Without Affecting Credit Score?

Pre-qualification shouldn’t affect your credit score.

When you pre-qualify for a financial product like a loan or line of credit, the lender or creditor is performing a soft credit check on you. This kind of credit check doesn’t impact your score at all.

Lenders use pre-qualification as a way to help people know if they’re likely to get approved for a loan or line of credit. However, even if you’re pre-qualified, you can still get turned down on your official application.

How Many Points Does a Hard Inquiry Affect Credit Score?

It depends.

Everyone’s credit history is different. Therefore, there’s no way to know how many points a hard check will take off of any single credit score. These kinds of credit entries don’t cause a huge impact, and new credit only makes up 10% of your overall score. Most people see a drop in their score of less than 5 points for a hard credit check. We talk about this and how to raise credit score by 200 points in another article.

How Long Do Hard Inquiries Affect Credit Score?

6 months

A hard credit check will stay on your credit report for 2 years. However, after 6 months it is no longer factored into your credit score. This type of item ages off your report faster than any other credit report entry.

Does Applying for Loans Affect Your Credit Score?

Yes, applying for a loan will create a hard check on your credit score.

That will lower it some. The impact from the application won’t be very large though. Additionally, if you’re applying for the same kind of loans with different lenders, then the credit reporting agencies treat all of those checks as a single check. Therefore, you should feel free to shop around to find the best deal.

Does Soft Credit Inquiry Affect Score?

No, a soft credit inquiry doesn’t impact your credit score at all.

The credit check may be included on your report, but it doesn’t influence the actual score. That’s the point of a soft credit check. It gives consumers and lenders enough of an idea about someone’s credit situation to decide whether or not they want to move forward in the process of applying. Also, your current creditors and lenders may perform a soft check for their own internal purposes.

Does Applying for Credit Card Affect Credit Score?

Yes, applying for a credit card will lower your score a bit.

Applying for a new credit card sends the signal that you’re a greater risk for default. That’s because companies assume you wouldn’t be applying for a credit card if you didn’t need the money. However, the impact is minimal and, as long as you use it responsibly, getting a credit card can help raise your score.

What Affects Your Credit Score?

Does Checking Your Credit Score Affect Your Credit?

It depends on how you check your credit.

If you use one of the free tools or the credit check methods that states and the federal government entitle you to, then no, this doesn’t affect your credit. That’s because these kinds of inquiries are known as a soft pull. They don’t influence your score at all.

Does Pre-Approval Affect Credit Score?

Pre-approval doesn’t affect your credit.

Pre-approval is given based on your credit records that are available from a soft credit check. A soft credit check doesn’t impact your score at all.

Does Cosigning Affect Credit Score?

Yes, cosigning on a loan or credit account will affect your credit score.

That’s because co-signing on something adds it to your credit history. Also, when you co-sign for a line or line of credit, the lender will perform a hard credit check on you. That will lower your credit score. Your score can also be impacted if the primary holder of the account fails to pay.

Do Insurance Quotes Affect Credit Score?

No, credit checks from insurance companies are soft checks.

The company isn’t selling you a loan or line of credit. That means the credit check they do doesn’t signal a higher level of risk of default to the credit reporting agencies.

Does Mortgage Pre-Qualification Affect Credit Score?

Most mortgage pre-qualifications won’t affect your credit score.

That’s because a pre-qualification usually uses a soft credit check. Pre-qualification works as a way to say that you’re likely to get approved for the mortgage. You’ll still have to formally apply at the time you want to buy a house. This is when most hard credit checks happen.

How to Check Credit Score Without Affecting It?

There are lots of ways to check your credit score without affecting it.

You can use any of the three major reporting agencies. State and federal laws mandate that consumers get at least one, and usually two, free credit checks per year to check for errors and problems.

Also, many of the credit monitoring services don’t impact your credit. That’s because they perform soft credit checks. These type of credit checks don’t indicate that you’re actively seeking more credit, so they don’t factor into your score at all.

Will Refinancing Affect Credit Score?

There are a few ways that refinancing can affect your credit score.

If the refinanced loan is reported as the same loan, then the way it is modified will impact how your score is affected. If the loan is reported as a new loan, then you’ll take a small hit for a new hard inquiry. Moreover, if the loan is reported as new, then it indicates a new credit obligation, which lowers your score.

Does a Car Lease Affect Credit Score?

Yes, a car lease is a type of installment loan.

You get money up front to pay for the car, and you pay the loan back according to the terms of the deal. The initial credit check for the loan will lower your score. Your score will also be lowered because you’re taking on a new credit obligation.

However, a car lease can also give your credit score a boost. That’s because it adjusts the mix of credit accounts on your record. It also lets you build your score by making consistent on-time payments.

What is the Additional Cardholder Effect On Credit Score?

That depends if you’re the account holder or the authorized user being added.

If you hold the account, your credit won’t be affected so long as you make all of your payments on time. Keep in mind you’ll be responsible for any purchases that the authorized user makes.

If you’re being added as an authorized user, then the account’s status and payment history are factored into your score. That means if the account has a solid record of on-time payments and low utilization, it can really help your credit score.

Do Multiple Inquiries Affect Credit Score?

It depends.

If you make multiple inquiries for the same kind of product, then the credit agencies treat these as one inquiry. For example, if you’re shopping for student loans and apply to four different lenders, then that’s treated as one credit check. It will affect your score, but only a little bit.

However, if you’re making multiple inquiries for different types of credit or loan products, then your credit score will take a bigger hit. That’s because each type of product you’re checked for will generate a new hard inquiry, which will lower your score. Having multiple hard inquiries for different products will send a signal that you’re having money issues.

Does Requesting Credit Line Increase Affect Credit Score?


A request for a credit line increase can come with a hard credit check. If that’s the case, then you’ll see a slight dip in your score.

However, some companies will approve a credit line increase without a hard credit check. That means your credit score won’t be affected.

Does a Parent Plus Loan Affect Your Credit Score?

Yes, Parent Plus student loans affect your credit just like any other type of student loan.

You’ll get a hard credit check, which will lower your score a bit. You’ll also reap the benefits of consistent on-time payments and suffer any penalties from late payments or default.

What Affects Your Credit Score?

Payment History

Payment history is the most heavily weighted factor that affects your credit score. It makes up 35% of the total score.

That’s because past behavior is usually very accurate at predicting future behavior. As a result, if you’ve missed lots of payments in the past, creditors expect you to do so again in the future. On the flipside, if you have a solid record of on-time payments, then creditors expect you’ll continue to make payments on time.

Do Medical Bills Affect Your Credit Score?

Medical bills do not directly affect your credit score themselves.

However, medical bills can have a huge impact on your credit score if you don’t pay them on time. Late or missed payments and being sent to collections are the biggest ways that medical bills affect your credit score.

How Long Do Late Payments Affect Credit Score?

7 years

A late payment will stay on your credit report for 7 years. But it affects your score less as time goes on. That means a 4 year old late payment won’t affect your score as much as a late payment for the past month. However if you're wanting your credit score to improve faster then you will either need to get them removed yourself or hire credit repair services to do so.

How Does Bankruptcy Affect Your Credit Score?

Bankruptcy will cause a steep drop in your credit score.

A Chapter 13 Bankruptcy will stay on your credit report for 7 years. A Chapter 11, or liquidation bankruptcy, will stay on your report for 10 years. A bankruptcy shows the credit reporting agencies that you were completely unable to handle your credit and debt obligations, which makes you a high risk for default. The good news is that the bankruptcy affects your score less and less as time goes on.

How Does Mortgage Forbearance Affect a Credit Score?

It depends.

Lenders have the option to report a forbearance to credit reporting agencies. However, they usually won’t do so. That means the forbearance is much better than the late or missed payments that you’d have if you didn’t take the forbearance offer.

How Much Does One Late Payment Affect a Credit Score?

It depends.

There’s no one formula for how much a certain thing will affect a credit score. Late payments have a larger effect on people with higher credit scores. However, people with fair to average scores won’t see as large of a drop in their score. Other factors, like payment history and length of accounts, make it impossible to know how much one late payment will impact your credit score.

How Much Does a Collection Affect Credit Score?

It depends.

A collections effort will impact your credit score more the higher your score is. It also depends on how you handle the collection efforts and the size of the debt being collected. The best way to ensure your credit score stays safe is to negotiate a settlement with the debt collection agency. Make sure you get an agreement from them in writing that they will not report the collection account to the credit reporting agencies.

Does Paying Rent Affect Credit Score?


If you landlord reports rent payments to the credit reporting agencies, then paying rent on time will boost your score. If the landlord doesn’t report, then it won’t affect your credit score at all.

Does Not Paying Water Bill Affect Credit Score?

It depends.

Many utility companies will hold off on reporting late or missed payments. If the company reports the payment, then it will cause your score to drop. If the company doesn’t report payments, then your score likely won’t be affected.

How Does Paying Collection Agency Affect My Credit Score?

Paying off the debt does not by itself affect your credit report.

Instead, you need to negotiate an agreement with the debt collection agency that they won’t report your collections if you make on-time payments. You can also negotiate a settlement for a lump sum and get them to agree in writing not to affect your report.

Do Phone Bills Affect Credit Score?

It depends.

If your phone service provider reports payments to the credit agencies, then on-time payments will boost your score and missed ones will hurt it. Otherwise, it won’t have any affect.

Does Paying the Minimum Affect Credit Score?

No, it’s better to make an on-time minimum payment than to miss a payment.

Missing a payment will lower your score. The minimum payment keeps your account in good standing, even if it doesn’t lower your credit utilization much.

How Much Does a Delinquency Affect Credit Score?

It depends.

Negative entries do more damage the higher your score is. It also depends on the severity of the delinquency and what other deal you work out with your lender or creditor.

How Does a Charge Off Affect Your Credit Score?

It usually lowers it.

If a creditor reports a charge-off on your account, then your score will drop. How much it drops depends on lots of other factors. If the creditor doesn’t report the charge off, then it won’t affect your account.

Credit Utilization

Credit Utilization makes up the second highest percentage of your credit score. It comes in at 30%. This is a measure of how much credit you have access to compared to how much you’re using.

Does Balance Transfer Affect Credit Score?

Usually a balance transfer will boost your score.

You may see a slight hit when you first open the balance transfer account. However, if you don’t use your first card and pay off the balance transfer card on-time, then your score will go up because you’ll be using less of your available credit.

Does Increasing a Credit Limit Affect Credit Score?

Yes, increasing a credit limit can affect your score in two ways.

If your creditor performs a hard credit check before the increase, then you’ll see a slight drop. However, if you get the increase and don’t use it, then your score will go up because you’re utilizing less of your available credit.

Does Overdraft Affect Credit Score?


However, overdrafts only affect your credit if you don’t pay the fees and the bank sends you to a collections agency. Checking accounts are not on credit reports.

Do Maxed Out Credit Cards Affect Credit Score?

Yes, a lot.

30% of your credit score comes from your credit utilization. That means if you have maxed out credit cards your score will take a big hit.

What Affects Your Credit Score?

More Complex Questions

This section is for questions that deal with multiple credit reporting factors. They are frequently examples of less common credit cases and questions.

Does Paypal Credit Affect Credit Score?


If you apply for Paypal credit you’ll see an initial score drop from the hard credit check. However, Paypal doesn’t currently report to credit agencies. Late payments won’t hurt your score, but on-time payments won’t help it.

Does National Debt Relief Affect Your Credit Score?

That depends on how you use their services.

Some of their services could cause an immediate drop in your score, but will build it up over time. Other services will cause a jump in your score.

How Does Debt Consolidation Affect Your Credit Score?

It depends.

If you consolidate revolving debt into an installment account and stop using credit cards, your score will go up because you’ll be utilizing less of your available credit. However, you’ll see a slight dip from the hard credit check necessary to get approved for the consolidation loan.

Does Credit Karma Affect Your Credit Score?


Credit Karma uses a soft credit check to tell you your score. That doesn’t impact your score at all.

Does Getting Married Affect Your Credit Score?


Your spouse’s credit history doesn’t affect your score at all. Your score can still be affected by joint accounts if you fall behind on payments.

Do Debit Cards Affect Credit Score?

No – debit cards are like an electronic checkbook.

They don’t affect your credit score because they’re not a line of credit.

Does Income Affect Credit Score?


Your income affects your ability to get approved for loans and lines of credit. However, it doesn’t directly affect your credit score, and is not listed on your credit report. So increasing income doesn't improve credit score numbers.

What is the Effect on Credit Score When Denied for Credit Card?

You’ll see a slight dip in your score.

However, that’s not caused by the denial. Instead, it’s caused by the hard check required to get approved. You’d see the same dip if you were approved.

Does a DUI Affect Your Credit Score?

A DUI will not directly affect your credit score.

However, the loss of money to fines, jail time, and other expenses can make it hard to pay your bills, which would impact your credit score.

How Many Points Does a Lien Affect Your Credit Score?

It depends.

Your credit score is the result of many factors. Everyone’s credit score and credit report is different. Generally, any negative item will affect people with higher credit scores much more than those with lower credit scores.

How Much Does a Tax Lien Affect Your Credit Score?

It depends.

Credit scores are generated from many different pieces of data. No two people have the same credit report. Generally, people with a higher credit score will take a bigger hit than people with a lower credit score.

Does Debt to Income Ratio Affect Credit Score?

No – income isn’t reported on your credit report.

Therefore, it doesn’t affect your credit. However, it does affect if you’ll be approved for a loan or not, as lenders and creditors use verifiable income and debt to income ratios to determine how likely you are to make payments.

Does a Paid Judgment Affect Credit Score?

No – the judgement is going to be on your report whether you’re paid or not.

It will be there for 7 years. Thankfully, as time moves on it will have a smaller and smaller impact on your score.

Will Changing My Address Affect My Credit Score?


Changing your address doesn’t affect your credit score.

How Does Adding Authorized User Affect Credit Score?

Adding an authorized user to your account doesn’t affect your credit score by itself.

If that user makes a lot of purchases and you can’t pay off your balance, then your credit score can go down. It can also go down because the new user is causing your credit utilization to be higher than it otherwise would be.

Does a Credit Freeze Affect Your Credit Score?

A credit freeze does not affect your credit score.

It can make it harder to get loans and lines of credit though, as you’ll have to unfreeze your credit reports prior to getting approval.

Emma Higgins

Emma has been helping people improve their credit scores for the past ten years and has written a number of credit repair companies reviews for us. Prior to that, she worked as a credit repair specialist and consultant for several of the best credit repair firms. She got into the credit repair industry after graduating with a degree in Finance before getting her MBA.