Credit scores are a mysterious concoction of factors that lenders use to determine loan eligibility. Despite their importance, credit scores remain shrouded in secrecy and are often misunderstood by the general public. Factors affecting credit score include payment history, amounts owed, length of credit history, new credit, and types of credit used. Of these factors, the most significant is payment history since it reflects whether or not an individual pays their bills on time. In addition to these factors, the importance of credit utilization ratio cannot be overstated as it measures how much of an individual's available credit they are using at any given time. A high utilization rate can negatively impact one's score while a low rate can help improve it.