What factors influence one's credit score, such as payment history, credit utilization, length of credit history, and types of credit used?

Credit scores are calculated by analyzing several factors related to an individual's credit history. The most commonly used credit score is the FICO score, which ranges from 300 to 850. The factors that influence a credit score and their relative importance are as follows:

Payment history (35%): This is the most critical factor in determining a credit score. Late payments or missed payments can significantly lower a credit score.

Credit utilization (30%): This is the percentage of credit available to a person that they are currently using. Higher utilization can indicate a higher credit risk, resulting in a lower score.

Length of credit history (15%): This factor takes into account the age of a person's credit accounts and how long it has been since they were used. Longer credit histories can result in higher credit scores.

Credit mix (10%): This refers to the different types of credit accounts a person has, such as credit cards, car loans, or mortgages. A mix of credit types can improve a credit score.

New credit inquiries (10%): This factor takes into account how frequently a person has applied for new credit accounts. Multiple inquiries in a short period can lower a credit score.

It is essential to note that the weight of each factor can vary depending on the individual's credit history and the credit scoring model being used.