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//// Financial · Credit & Borrowing

How Credit Scores Actually Work

Your credit score is a report card for borrowed money. See the exact FICO formula, simulate your score, and explore what-if scenarios.

Where this fits

💸 Budgeting & Cash FlowCash FlowStudentsHouseholds

This tool lives inside Cash Flow and is most useful for students and households.

401(k) Limit 2024$23,000
Roth IRA Limit$7,000
S&P 500 Avg Return~10%/yr

Estimated FICO Score

809/ 850

Exceptional
300 (Poor)850 (Exceptional)

Your credit score is basically a report card for how you handle borrowed money. The higher the score, the more lenders trust you — and the better rates you'll qualify for.

FICO Factor Breakdown

Payment History35%
149 / 297.5
Amounts Owed30%
200 / 255
Length of History15%
26 / 127.5
New Credit10%
70 / 85
Credit Mix10%
65 / 85

Adjust Your Inputs

On-time payment streakmonths
12 mo
0 mo120 mo
Credit utilizationamounts owed
30%
0%100%
Age of oldest accountlength of history
2 yr
0 yr30 yr
Hard inquiries (last 2 yrs)new credit
1
010

What-If Scenarios

See how specific events would affect your estimated score right now.

Miss one payment

-148 pts

Resets your on-time payment streak to zero — the single most damaging thing you can do to a credit score.

Max out your card

-200 pts

Spikes your utilization to 100%. Lenders see this as a sign of financial stress even if you pay it off monthly.

Open a new card

-15 pts

Adds one hard inquiry. The short-term dip is usually small — and new accounts can help utilization long-term.

Score Tiers at a Glance

Poor

< 580

Fair

580–669

Good

670–739

Very Good

740–799

Exceptional

800+

You are here

Tiers are based on FICO score ranges used by most major lenders. "Exceptional" borrowers typically qualify for the best rates on mortgages, auto loans, and credit cards.

1

Payment History (35%)

min(onTimeMonths / 24, 1) × 297.5

min(12 / 24, 1) × 297.5

= 148.8 pts

Full credit at 24+ consecutive on-time months. Each missed payment resets the streak toward 0.

2

Amounts Owed (30%)

piecewise: 255 pts ≤10%, 200 pts at 30%, 100 pts at 50%, 50 pts at 75%, 0 pts at 100%

utilization = 30%

= 200.0 pts

Keeping utilization under 10% earns the full 255 pts. The sweet spot most experts recommend is under 30%.

3

Length of History (15%)

min(oldestAccountYears / 10, 1) × 127.5

min(2 / 10, 1) × 127.5

= 25.5 pts

Full credit at 10+ years of credit history. This factor rewards patience — don&apos;t close old accounts.

4

New Credit (10%)

max(0, 85 − hardInquiries × 15)

max(0, 85 − 1 × 15)

= 70.0 pts

Each hard inquiry (new credit application) costs ~15 pts. Inquiries typically age off within 12–24 months.

5

Credit Mix (10%)

Fixed 65 pts (assumes average mix of revolving + installment accounts)

65 pts assumed

= 65 pts

A healthy mix includes credit cards (revolving) and loans (installment). This tool assumes you have a typical mix.

6

Total Estimated Score

PaymentHistory + AmountsOwed + Length + NewCredit + Mix + 300 base, clamped 300–850

148.8 + 200.0 + 25.5 + 70.0 + 65 + 300

= 809 (Exceptional)

The +300 base reflects that FICO scores start at 300, not 0. Total is clamped to the 300–850 range.

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