Our credit score is vitally important, but can be tricky to understand — and that confusion can hurt our financial well-being and cause anxiety. After all, when we don’t understand what something really means or how it affects us, we’re more likely to make uninformed choices that are costly — both in terms of money and stress. 

Knowledge really is power when it comes to our money, which is why we’ve created this credit score guide. Read on to learn about what a credit score really represents, why it’s so important, and how to keep yours strong. 

What is a credit score, and why does having a “good score” matter? 

Put simply, your credit score is a number that represents your history of borrowing and paying back money. Whether you’re applying for a mortgage or taking out a loan, your credit score will be one of the factors that determines your eligibility. The higher the score, the more trustworthy you’re considered to be by lenders. If your credit score is considered to be too low (more on what qualifies as low in a moment), you could hurt your chances of qualifying. 

Think of it this way: A lender isn’t likely to lend you money if your history shows that you don’t pay people or companies back on time, and if they do take a chance on you, you might not get the best possible deal. Ultimately, having a higher score could result in lower premiums. 

What’s considered a “good” credit score? 

FICO® Scores, used by 90% of lenders, use a scoring system from 300 to 850. While higher numbers indicate better credit, there are ranges. They go from “poor” (lowest credit score) to “exceptional” (highest score).

What factors affect my credit score? 

There are five main categories that can affect your FICO® Credit Score: payment history, amount(s) owed (a.k.a. credit utilization, or how much of your credit you’re actually using each month), length of credit history, new credit (for example, have you opened a bunch of credit cards recently?), and credit mix (it’s beneficial to have more than one type of credit, for instance, a mortgage and a credit card, and manage both responsibly). 

Each category is weighed differently, but payment history has the biggest impact — contributing to approximately 35% of your score. The most effective way to keep your payment history — and thereby your credit score — in good standing is to pay your bills on time. To keep you on track, try setting up automatic payments, or creating a calendar reminder to pay your bills by a certain date each month. 

Microstep: Set up calendar reminders to pay your bills on time. You’ll avoid late fees and reduce stress when bill-paying time comes around. 

If finances are tight right now and you’re worried about paying your bills on time, try reaching out to your lenders for support. There’s a zero percent chance you’ll get help — in the form of no penalties for late payments, reduced interest fees, or other types of relief — if you don’t ask. 

Besides paying my bills on time, how can I improve my credit score? 

One great way to take control of or maintain your score is to focus on keeping your credit utilization low. Credit utilization is the ratio of your total available credit to the amount of credit used, or your amounts owed. “Lenders are wary of lending to consumers who are carrying a lot of debt, or have higher credit utilization,” Tom Quinn, Vice President of Scores at FICO®, told Thrive Global. To keep your utilization low, experts recommend making periodic bill payments throughout the month, rather than just a monthly payment on your due date. By making frequent small payments, you have a better chance of your balance being low when your card issuer reports your balance to the credit bureau once per billing cycle. 

In addition, simply staying on top of your credit score is a simple way to ensure you keep it where you want it. One study found that knowing your score helps you reduce late payments and take control of your score. Checking it regularly will make you more mindful of your financial situation, and help you alleviate stress in the long run. Plus it’s easy to do, especially with services like Discover’s Credit Scorecard, which allows you to check your FICO® Credit Score for free even if you’re not a card member.* 

Microstep: Every 30 days, check your credit score. 90% of top lenders use FICO® Credit Score, so set a calendar reminder to get a quick picture of your financial well-being. 

Discover and Fair Isaac are not credit repair organizations as defined under federal or state law, including the Credit Repair Organizations Act. Discover and Fair Isaac do not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history or credit rating. FICO is a registered trademark of Fair Isaac Corporation in the United States and other countries. 

*Credit Scorecard Information: Credit Scorecard is provided by Discover Bank, and includes a FICO® Credit Score and other credit information. Credit Scorecard information is based on data from Experian and may differ from credit scores and credit information provided by other credit bureaus. This information is provided to you at no cost and with your consent. You must be 18 years old and a U.S. resident or a resident of America Samoa, Guam, Northern Mariana Islands, Puerto Rico or the Virgin Islands. Your Credit Scorecard will be refreshed the later of every 30-days or the next time you log in to Credit Scorecard. Discover and other lenders may use different inputs, such as a FICO® Credit Score, other credit scores and more information in credit decisions. This product may change or end in the future. FICO is a registered trademark of Fair Isaac Corporation in the United States and other countries.

Discover credit monitoring and Social Security number alerts are offered by Discover Bank at no cost, only available online, and currently include the following services: (a) daily monitoring of your Experian® credit report and an alert when a new inquiry or account is listed on your report; (b) daily monitoring of thousands of Dark Web sites known for revealing personal information and an alert if your Social Security Number is found on such a website. This information is provided for free, as part of Discover’s Free Credit Scorecard membership to both existing and new members upon successful product registration. Alert services are based on Experian information and data which may differ from information and data at other credit bureaus. Monitoring your credit report does not impact your credit score. This benefit may change or end in the future. Discover Bank is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. To see a list of Frequently Asked Questions, visit discover.com/free-credit-score.


  • Alexandra Hayes

    Content Director, Product & Brand, at Thrive

    Alexandra Hayes is a Content Director, Product & Brand, at Thrive. Prior to joining Thrive, she was a middle school reading teacher in Canarsie, Brooklyn.