How is your credit score calculated?

Anjali From Team Brigit

What’s the right credit score range, how to build credit fast, and how Brigit can help.

Our new tool can build your credit score to get you that car loan, mortgage, or credit card you’re dreaming about.


More than half of Americans have been rejected when applying for a loan or a credit card because of their credit scores, according to a 2019 survey. 


Your credit score is the three-digit number that determines if you’ll be approved for credit cards, car loans, home mortgages, and much more — and the higher the score, the better your chances are of being approved.


Yet a 2019 survey found that about 4 in 10 Americans did not actually know how this all-important number is calculated. 


If you’re one of them, keep reading. Brigit can help explain how credit scores work and, most importantly, how its new tool can help you build your credit if you don’t have any, or if your credit score doesn’t fall in the desirable range.


Credit scores typically range from 300 to 850, but most lenders will not approve loans or credit cards for people with scores below 635.


A credit score above 670 is generally considered a “good” credit score, while one below 580 is considered a “poor” credit score by lenders.


There are three major agencies that calculate your credit score: Equifax, Transunion, and Experian. These agencies create your credit report, which is used to determine your credit score, and share this information with lenders.


So how is this magic number calculated? In five main ways:


  1. Payment history counts for 35 percent of your credit score, which makes it the single most important factor. Your payment history is a record of whether you have paid your past bills on time or not. If you pay a bill more than 30 days late, it lowers your credit score. A positive payment history shows that you can reliably pay back your debts.

  1. Your credit utilization, or how much of your available credit you use, counts for 30 percent of your credit score. Credit utilization refers to what percent of your credit limit you use — the less credit you use, the better this is for your credit score. Using less than 30% of your credit will boost your credit score. For example, if you have a credit card with a $300 limit, spending less than $100 on it will help your credit score. Your credit utilization shows lenders that you can borrow responsibly.

  1. The length of your credit history counts for 15 percent of your credit score. The older your accounts are, the more they help your credit score. Even if you no longer use an account or credit card, keeping it open will help increase the length of your credit history and boost your credit score. A mature credit history tells lenders that you have experience holding accounts and managing your credit. 

  1. Credit mix counts for 10 percent of your credit score. Your credit mix is the type of credit accounts you have, such as credit cards, car loans, mortgages, or personal loans. Having a range of different kinds of credit can help your credit score because it shows that you can successfully manage many types of credit. 

  1. New credit counts for the remaining 10 percent of your credit score. New credit is the number of credit accounts you’ve opened recently and the number of “hard” inquiries made by lenders when you apply for credit.1 Opening too many new accounts in a short span of time can hurt your credit score because it can make you seem risky to lenders, so it’s better to apply for credit only when you need it and space out new credit accounts. 

pie chart outlining the factors that go into a credit score

Now that you know the ingredients of the credit score secret sauce, how can you improve the recipe?


Brigit’s Credit Builder helps you build your credit score and save money at the same time. 


Credit Builder is a new feature of the Brigit Plus membership. When you apply for a “credit builder” account, Brigit takes out a 1-year loan in your name and improves your payment history — the largest factor in your credit score — by making on-time loan payments on your behalf every month. (Remember that payment history counts for 35 percent of your credit score.)


The “credit builder” account also improves your credit mix because it is a new line of credit in your name (this counts for 10 percent of your score). 


So, in a matter of months, you will be able to start building your credit, even if you started with a clean slate, or if you had mature credit in an undesirable range.


All you need to do is contribute as little as $5 a month towards repayment of the loan, and your payments are returned to you in full once your loan has been fully paid off. 


Let us do the heavy lifting for you and sign up here today.




1 (A hard inquiry is when a lender checks your credit score before approving you for a loan or credit card; these inquiries are outlined on your credit report. In contrast, a soft inquiry, in which you or an interested party (such as an employer or insurance company) checks your credit score, does not show up on your credit report.) 

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