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Broke by Choice

Being broke is expensive. Staying broke is a decision.

From Zero to Not Broke

Your credit score, as arithmetic instead of folklore

Thirty-five of the hundred weighting points are simply paying on time, which costs nothing. Your income is not in there at all.

by · · 8 min read

A FICO Score is not a personality assessment. It is five weighted buckets, and FICO publishes the weights: payment history 35 percent, amounts owed 30 percent, length of credit history 15 percent, new credit 10 percent, credit mix 10 percent[1]. That is the whole model at the level anyone outside the company gets to see it.

Read the first two lines again. Sixty-five of the hundred points are “did you pay” and “how much do you owe against your limits”. FICO names payment history the single most important factor[2] – and it is the only one of the five that costs nothing at all to protect.

What is not in there

Your income. It is not an input to the score, because the score is calculated only from what sits in your credit report, and your salary is not in your credit report[3]. Lenders may well look at income separately when they decide whether to lend to you – but the number itself does not know what you earn. People find this genuinely surprising, and it explains a lot of otherwise baffling outcomes.

Why this article contains no point values

Because FICO says outright that the effect of any single factor cannot be worked out without looking at the whole report[4]. Every “this will raise your score by 40 points” headline is therefore either a guess or an average of situations that are not yours. We would rather leave the gap visible than fill it with a number that sounds precise. The weights above are real; the points are not published, by anybody.

What the score is actually worth, in money

This is the part that makes it concrete. Take the average American used-car loan – 27,070 dollars at 531 dollars a month. At the average used-car rate of 11.43 percent the first year alone costs $2,917 in interest, and the whole loan runs 71 months and costs 10,163 dollars in interest. At the average new-car rate of 6.39 percent, same balance and same payment: 1,591 dollars in the first year, 60 months, 4,597 dollars in total. Five percentage points, and the loan is eleven months shorter and 5,566 dollars cheaper.

The gap between those two rates is not entirely about scores – it is also about the collateral and about manufacturer-subsidised financing. But rate tiers are the mechanism through which a score turns into money, and on a car loan the difference runs into four figures over the term. That is the answer to “what is a credit score worth”: it is worth whatever the rate difference is on the next thing you borrow for.

Run it with two rates

This calculation runs on our server and is not stored – neither your result nor your entry.

Until you are out

71 months

Paid in total

$37,233

Of that, interest

27.3%

Outstanding $27,070
Your payment per month $531
Months until it is paid off 71.00
Paid in total $37,233
Of that, interest $10,163

Assumptions behind this calculation

  • The rate you enter is read as a nominal APR and divided by twelve, the way a card statement builds its periodic rate. Taking the twelfth root instead would understate the very number this is about.
  • Calculated month by month in whole cents: interest on first, payment off second. That is the order a bank posts in, and it is the order you can check.

Put in a balance you might realistically borrow, then run it twice: once at a rate you would get today and once at a rate two or three points lower. The difference between the two totals is what the score is worth to you, in dollars, on that one loan. It is a more useful number than any point target.

The practical part: reading the report is free

The Fair Credit Reporting Act entitles you to one free copy of your report each year from each of the three nationwide bureaus, through AnnualCreditReport.com[5]. On top of that statutory entitlement, all three have permanently extended free weekly reports through the same site[6]. Fifty-two chances a year to look at the thing the score is calculated from, at no cost.

It matters because the score is downstream of the report. An account that is not yours, a balance that was paid and never updated, a collection that should have aged off – each of those moves the two biggest buckets, and none of them is visible from the score alone.

How long things stay

The Fair Credit Reporting Act sets the clocks. An account placed for collection or charged to profit and loss may not be reported once it is more than seven years old, and the same seven-year limit is the catch-all for other adverse items[7]. Bankruptcy is the exception with the longer clock: ten years[8].

Which means the worst thing in your file has an expiry date, and it is a date you can count to. For context, Experian puts the average US FICO Score at 713 for 2025[9] – a number worth knowing mostly so that you can stop treating any particular score as a verdict on your character.

What you can do about it

  1. Automate the minimum payment on everything, today

    Not the full balance – the minimum, as a safety net under whatever you actually intend to pay. Payment history is the largest single component of the score and the only one that costs nothing, and almost every avoidable hit to it comes from a payment that was forgotten rather than unaffordable. Fifteen minutes in the banking app, once.

  2. Pull all three reports this week and read them

    Free, weekly, from AnnualCreditReport.com – the site the statute and both agencies point to. Read for three things: accounts you do not recognise, balances that are wrong, and items past the seven-year clock. Everything else is noise; those three are what actually moves the two biggest buckets.

  3. Leave old accounts open, unless they cost you money

    Length of credit history is 15 percent of the weighting, and closing an old card shortens it while also reducing your total available limit – which touches the amounts-owed bucket as well. If the card carries an annual fee, that is a real cost and closing it may still be right. If it is free and dormant, closing it is a decision with a downside and no upside.

  4. Ignore anybody selling you points

    FICO itself says the effect of a single factor cannot be measured in isolation, which makes every specific points promise unprovable by construction. Credit repair that consists of disputing accurate information is not a service, it is a delay. What genuinely works is boring: pay on time, owe less against your limits, and let the clocks run.

Frequently asked

Which score is the real one?

There is no single one. FICO publishes several versions, the bureaus sell their own models, and a lender picks whichever it uses. That is exactly why this article is about the weights rather than about a target number: the categories behave the same way across models, while the number on any given app is one model's opinion on one day's data.

You quote FICO on how FICO works. Is that not marketing?

It is the company describing its own product, and we say so. It is also the only published source for the weights – nobody outside Fair Isaac can audit the model. We use it for what it is: the manufacturer's own statement of its ingredients, cross-checked where possible against an independent bureau, which is why the average score figure comes from Experian instead.

Does checking my own report hurt my score?

Checking your own report is a soft inquiry and is not treated like an application. That is the general mechanism rather than a promise about your file – but it is why the free weekly report exists and why not looking is the more expensive habit of the two.

This article is not investment advice. We describe how things work and what they cost. What fits your situation is yours to judge – if in doubt, with someone who knows it.

Sources

  1. What's in my FICO Scores: payment history 35 percent, amounts owed 30 percent, length of credit history 15 percent, new credit 10 percent, credit mix 10 percent, myFICO, Fair Isaac Corporation, retrieved August 24, 2026.
  2. What's in my FICO Scores: payment history is the most important factor in a FICO Score, myFICO, Fair Isaac Corporation, retrieved August 24, 2026.
  3. What's in my FICO Scores: FICO Scores are calculated only from the information in credit reports; income is not part of the score, myFICO, Fair Isaac Corporation, retrieved August 24, 2026.
  4. What's in my FICO Scores: the impact of any single factor cannot be measured without looking at the entire credit report, myFICO, Fair Isaac Corporation, retrieved August 24, 2026.
  5. How do I get a copy of my credit reports: one free report a year from each of the three nationwide credit reporting companies through AnnualCreditReport.com, Consumer Financial Protection Bureau, retrieved August 24, 2026.
  6. Free credit reports: the three nationwide credit bureaus permanently offer free weekly reports through AnnualCreditReport.com, Federal Trade Commission, retrieved August 24, 2026.
  7. Fair Credit Reporting Act, 15 U.S.C. 1681c: accounts placed for collection or charged to profit and loss, and other adverse items, may not be reported after seven years, U.S. Government Publishing Office, United States Code, retrieved August 24, 2026.
  8. Fair Credit Reporting Act, 15 U.S.C. 1681c: cases under title 11 may not be reported after ten years, U.S. Government Publishing Office, United States Code, retrieved August 24, 2026.
  9. What is the average credit score in the U.S.: average FICO Score of 713 in 2025, Experian, retrieved August 24, 2026.

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