Skip to main content

How to Understand a Credit Card Point System

If you've been turned down for a loan or worry about your credit score, this guide will enlighten you as to how that number is calculated.


  • Step 1: Learn the scale Learn the credit card scoring scale, which ranges from 300 to 850. A high number shows you are a good risk while a low number shows you are a bad risk.
  • Step 2: Avoid late payments Avoid making late payments or missing a payment -- this accounts for 35 percent of your credit score.
  • TIP: The amount of money you make is not a factor when calculating your score.
  • Step 3: Avoid maxing-out an account Avoid reaching the limit on an account. The amount borrowed versus your limit accounts for 30 percent of your credit score.
  • Step 4: Stick with an account Stick with one or two cards. The longer you have had a single credit card the better, and it accounts for 15 percent of your score.
  • TIP: While there is no quick way to boost your credit score, paying off cards, closing multiple accounts, and making payments on time can slowly improve it.
  • Step 5: Pass on new accounts Pass on opening credit accounts for a one-time discount. Loyalty and good financial decisions account for 10 percent of your score.
  • Step 6: Mix up types of credit Mix the types of credit you have, such as cards, loans, retail accounts, and mortgages. This is another 10 percent of your score.
  • Step 7: Check online Check your score online for mistakes. Nearly all banks and financial institutions report millions of purchases, payments, and other information every day.
  • FACT: In 2010, the U.S. national debt totaled $12 trillion, or about $40,000 for each citizen in the country.

You Will Need

  • Credit cards
  • Different types of credit
  • Internet access

Popular Categories