The American credit scoring system is unique in the world — a three-digit number that affects nearly every major financial decision you'll make. Unlike many countries where payment history is more informal, the US uses a standardized FICO model that lenders rely on heavily.
What goes into your FICO score
| Factor | Weight | What it means |
|---|---|---|
| Payment history | 35% | Every late payment matters, especially recent ones |
| Credit utilization | 30% | How much of your available credit you're using |
| Length of credit history | 15% | Older accounts help; closing old cards hurts |
| Credit mix | 10% | Having both revolving and installment credit helps |
| New credit inquiries | 10% | Hard pulls temporarily lower score ~5 points |
The fastest ways to improve your score
- Pay down credit card balances. Utilization below 10% is ideal. Even getting from 50% to 30% can add 20-40 points quickly.
- Never miss a payment. Set up autopay for minimums on every account. One 30-day late payment can drop your score 60-110 points.
- Don't close old accounts. Even if you don't use a card, keeping it open maintains average account age and available credit.
- Ask for a credit limit increase. Higher limit + same balance = lower utilization = higher score. Call your card issuer annually.
- Become an authorized user. If a family member has a long, clean credit history, being added as an authorized user can add years of history to your report.
The score ranges and what they cost you
| Score range | Classification | 30-year mortgage rate est. |
|---|---|---|
| 760-850 | Exceptional | Best available rate |
| 720-759 | Very Good | +0.2-0.4% |
| 680-719 | Good | +0.5-0.8% |
| 640-679 | Fair | +1.0-1.5% |
| Below 640 | Poor | +2%+ or denial |
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About the author
Enrique 'Kike' Faúndez is an Information Systems and Management Control Engineer from Universidad de Chile, with master’s degrees in Finance from Universidad de Chile and Industrial Engineering from Pontificia Universidad Católica de Chile. He has 15+ years of experience in regulated financial services across finance, operations, and digital product development. He founded CashControlly in Santiago, Chile, with the conviction that personal financial control should not be a privilege, but an accessible and well-designed tool.
- Master's in Finance, Universidad de Chile
- Master's in Industrial Engineering, Pontificia Universidad Católica de Chile
- Information Systems and Management Control Engineer, Universidad de Chile
- AI and ITIL certifications
- 15+ years in regulated financial services
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