What Credit Is & How It Works

“Know the rules, play the credit game to win.”

Credit is essentially your financial report card — a record of how you’ve managed money and debt over time. It’s made up of several key factors that reflect your borrowing and repayment habits:

1. Payment History (35%)
   The most important factor. Lenders want to see consistency — paying bills on time shows reliability, while missed or late payments hurt your score quickly.
2. Credit Utilization (30%)
   This measures how much of your available credit you’re using. Keeping usage below 30% of your total limit tells lenders you manage credit responsibly.
3. Length of Credit History (15%)
   The longer your accounts have been open and in good standing, the better. It gives lenders a clearer picture of your long-term financial behavior.
4. Credit Mix (10%)
   Having a variety of accounts — such as credit cards, car loans, and a mortgage — shows you can handle different types of debt.
5. New Credit (10%)
   Opening too many new accounts in a short period can make you appear risky, as it may suggest financial instability.