For better or for worse, humans rank humans. It’s what we do. If you’ve ever stepped foot inside a classroom, athletic arena, or been on a blind date, you know the stilled, careful stare of judgment. In some cases, perhaps all too acutely.

Your credit score, at its core, is no different. Credit scores are a numeric value assigned to your creditworthiness. Card issuers need a simple way to tell whether we, as borrowers, will act in good faith and pay back what we owe. To determine exactly that, their credit bureau compatriots assign all of us a value between 300 (the worst of the worst) and 850 (the best of the best).

But what is it that separates the 350s from the 850s? Or more realistically, the 630s from the 720s? No credit score is set in stone, and even the lowliest can be repaired over time. So what is it that moves the needle? Turns out, a little more — and a little less — than you might think. Allow us to explain.

The Basics of a Credit Score

  • Payment History: The biggest and easiest-to-understand component of your credit score is your payment history. About 35% of your score is determined by your public record of on-time payments. That goes for car leases, home loans — any large, staggered payment with your name on it.
  • Credit Usage: Around 30% of your score is determined by how effectively you employ existing credit cards. It’s also known as your Overall Utilization Rate, or the ratio between total balances owed and total credit limit. You want a nice, even spread of activity between all your accounts.
  • Credit History: Chalk 15% of your score to the length of time you’ve held open accounts. The longer, the better (which obviously makes things tough for newbies).
  • New Credit: What you’ve done lately can influence about 10% of your credit score. Open too many accounts in one swing or take on large amounts of debt and you might get dinged.
  • Types of Credit: That last 10% is all about your credit mix. The more diverse you are (mortgage loans, car loans, credit cards, etc.), the better off you’ll be.

The Oddballs

All that seems simple enough. Mostly because it is. That said, there’re plenty of ways to penalize your score without even realizing it. A few to note:

  • Inquiries: Credit inquiries occur when businesses request to check your credit, and come in two different flavors: hard and soft. Hard inquiries occur when your credit is reviewed directly by a prospective lender — these can have a small effect on your credit score. Soft inquiries occur when your credit is reviewed by someone other than a prospective lender — these are trivial to your credit score.  It seems paradoxical that the device for checking your credit score could be responsible for hurting your credit score. But hey, that’s the game. Hard inquiries are inevitable but spread them out over time and you’ll be absolutely fine.
  • Bad Company: It’s important to know who shares your card, and how they choose to spend. If you have an authorized user on an account with bad or worsening credit, yours could come along for a bumpy ride.
  • Reporting Errors: Every so often, credit rating agencies make mistakes. Signals cross. Coding errors happen. Be sure to keep an eye on the line items that make up your credit score, and ensure you have been attributed the activity that’s truly yours.

To Wrap

Any credit card holder should keep the pulse of their credit score. There are a number of services that can help you do so (without dinging you in the process) — Bankrate’s at the top of that list. Our free credit report can give you a once-over, painting the full portrait of your credit history and highlighting areas to improve.

As a rule of thumb, keep your balances low, pay on time and spend responsibly. Those are the simplest ways to maintain and improve your score.