What Your Credit Score Measures

Not a measure of wealth

A credit score predicts one narrow thing: the likelihood you repay borrowed money on time. Someone with a large income and a history of missed payments can score worse than someone with a modest income who has never been late.

The five inputs

Factor	Rough weight	What helps
Payment history	~35%	Never miss a due date, even a minimum
Amounts owed	~30%	Keep balances low relative to limits
Length of history	~15%	Keep your oldest account open
Credit mix	~10%	A blend of instalment and revolving credit
New credit	~10%	Avoid many applications in a short window

Exact weights vary between scoring models, but the ordering is stable everywhere: paying on time and not carrying large balances dominate.

Utilisation, the fastest lever

Utilisation is the share of your available credit you are currently using — your balance divided by your credit limit.

Below 30% is the usual guidance; below 10% is better. Unlike payment history, which takes years to repair, utilisation updates as soon as your statement posts, so paying a balance down can move your score within a single cycle.

Why it is worth caring about

The score is not a grade. It is a price tag. On a long-term loan, the interest rate difference between good and poor credit can add up to a very large sum over the life of the loan — for exactly the same house, the same car, the same borrowed amount.