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A credit score is a three-digit number, most commonly the FICO score ranging from 300 to 850, that lenders use to estimate how likely you are to repay borrowed money. It’s built from your credit report, a history of your borrowing and payments compiled by credit bureaus. A good score saves you real money: better mortgage and loan rates, cheaper insurance in many places, and easier apartment approvals.
The FICO formula weights five factors: payment history (about 35%), whether you pay on time; amounts owed (about 30%), especially your credit utilization, meaning the share of your credit limits you’re using; length of credit history (about 15%); new credit (about 10%); and credit mix (about 10%). Notice that two behaviors, paying on time and keeping balances low, control about two-thirds of your score.
The practical playbook: automate at least minimum payments so you never miss one; keep utilization low, ideally under about 30 percent of your limit and lower is better; keep old accounts open to preserve history length; and don’t apply for lots of new credit at once. Finally, check your actual credit reports regularly for errors, which are common and fixable, using the official free channels available in your country (in the US, annualcreditreport.com).