The 6 Key Factors To Achieving a 750+ Credit Score (A No-BS Guide)
By Taylor Thomas, Founder & CEO
February 4, 2025
If you’ve ever felt confused by credit scores—how they’re calculated, why your score isn’t where you want it to be, or which actions actually make a difference—you’re in the right place. In this no-nonsense guide, we cut through the fluff and dive straight into the core principles that determine whether your credit score rises or falls. By the end you’ll walk away with clear, actionable steps to increase your credit score.
What makes us qualified to talk about this topic?
Many of us on the ArbitrageCard team were immersed in the world of credit cards and travel hacking long before we ventured into the gift card business—and we still remain very active in it to this day. Over the years we’ve learned through hands-on experience, trial and error, and by networking with experts in the industry. We open new credit cards regularly, maintain high credit scores, and the vast majority of the time book our flights and hotels with points rather than paying with cash.
FICO vs. Credit Karma: A Quick Terminology Guide
Before we dive into each factor, it’s important to note that FICO (a widely used scoring model) and Credit Karma can display slightly different categories—even though they’re mainly measuring the same things. Here’s a quick comparison:
- Payment History (FICO and Credit Karma)
- Amounts Owed (FICO) / Credit Card Use (Credit Karma)
• Both refer to credit utilization—how much of your available credit you’re using. - Length of Credit History (FICO) / Credit Age (Credit Karma)
- Credit Mix (FICO) / Total Accounts (Credit Karma)
• FICO focuses on the variety of credit types. Credit Karma emphasizes the total number of accounts but still values diversity. - New Credit (FICO) / Hard Inquiries (Credit Karma)
- Derogatory Marks (This is only shown as a separate category on Credit Karma, but it still can affect your Payment History in FICO)
Despite the naming differences, the general principles remain the same: pay on time, keep your balances low, and let your accounts age.
The Factors That Shape Your Score
(This is an image of the FICO chart which displays the different factors and how much each one affects your credit score)
1. Payment History (35% FICO) / Payment History (Credit Karma)
• What It Is: A record of on-time vs. late payments.
• Why It Matters: This is the largest slice of your score. Missing even a single payment can drop you from 100% on-time to 99% (or lower), which often moves you from an “excellent” to a “good” or “fair” range in many models.
• How to Optimize: Set up auto-pay for at least the minimum (ideally the full statement balance) so you never miss a due date. Aim for no late fees or delinquent payments.
2. Amounts Owed (30% FICO) / Credit Card Use (Credit Karma)
• What It Is: How much credit you’re using compared to your total available credit. Credit Karma calls this “Credit Card Use,” while FICO uses “Amounts Owed”. Another term widely used for this is “credit utilization rate”.
• Why It Matters: A high utilization rate suggests you rely heavily on credit, which can lower your score.
• How to Optimize: Keep your utilization rate under 5% if possible—that’s typically considered “excellent.”
If you make regular large purchases (e.g., business inventory), use business credit cards since those don’t report to your personal credit (with the exception of certain issuers like Capital One).
Key Insight: Notice that Payment History (35%) + Amounts Owed / Utilization (30%) = 65% of your FICO score. Excelling in these two categories alone sets you up for success.
Compare this to New Credit (hard inquiries), which only accounts for 10% of your credit score. As we’ll talk about later, hard inquiries aren’t nearly as big of a concern as some might think, and you can maintain an excellent credit score simply by focusing on the big factors that have the most impact.
3. Length of Credit History (15% FICO) / Credit Age (Credit Karma)
• What It Is: The age of your credit accounts.
• Why It Matters: The longer you’ve responsibly managed credit, the more favorably lenders view you.
• How to Optimize: Keep older accounts open whenever possible—closing them can shorten your average account age as well as remove positive payment history. Understand that opening new accounts can slightly reduce your average age, but it can still be worthwhile long-term (especially if it boosts your total available credit and reduces your utilization rate).
4. Credit Mix (10% FICO) / Total Accounts (Credit Karma)
• What It Is: FICO emphasizes your variety of credit (installment loans, revolving credit, mortgages, etc.). Credit Karma focuses on the total number of accounts you have, though it also implicitly values diversity.
• Why It Matters: Demonstrates your ability to handle multiple types of credit responsibly over time.
• How to Optimize: Don’t take on unnecessary debt just for a better mix, but adding accounts over time (credit cards, auto loans, mortgages) can help.
Each new card you open increases your total accounts on Credit Karma’s score breakdown—if you manage them responsibly, having more cards actually improves your score.
5. New Credit (10% FICO) / Hard Inquiries (Credit Karma)
• What It Is: Refers to recent credit inquiries and newly opened accounts.
• Why It Matters: Too many inquiries in a short span can signal risk to lenders.
• How to Optimize: Space out your applications, especially if you plan to apply for a major loan soon. Remember, each hard inquiry can temporarily lower your score by around 5–10 points, but if you manage new cards responsibly, the long-term benefits (e.g., improved utilization, more total accounts, more positive payment history) can significantly outweigh the short-term dip.
6. Derogatory Marks (Credit Karma)
• What It Is: Collections, delinquencies, or other serious marks on your record.
• Why It Matters: These can significantly lower your score and often take time to resolve.
• How to Address:
-
- Check Your Credit Report: See if you have any derogatory marks (some people have them without even realizing it).
- Contact the Creditor or Collection Agency: If you owe money, ask if they’ll remove the negative item upon full payment (sometimes called “pay for delete”).
- Read More: Check out this Credit Karma article for in-depth tips on dealing with collections and other negative entries.
(This is an image of Credit Karma’s list of factors and how much each one affects your credit score. To see your own numbers for these factors, go to your account dashboard (also called “Today”), click on your Transunion or Equifax score, and then scroll down to see “Credit Factors”)
Myths and Realities of Credit Scores and New Credit Cards
“Will getting a new credit card hurt my credit score?”
A common misconception is that applying for new credit cards will significantly and permanently damage your credit score. While it’s true that a new application can cause a temporary dip—usually by around 10 points—your score normally will go back up to where it was originally within a month or two. In the long run, having and responsibly managing multiple credit cards can improve your credit score through:
• Increased total available credit (which lowers your utilization rate)
• More on-time payment history across multiple accounts
• Positive impact on your total accounts or credit mix
A Real-World Example
To illustrate this, I currently have 25 active credit cards and maintain an average credit score of around 775—all while carrying no personal debt and paying zero dollars in interest or late fees. If having “too many” cards automatically tanked your score, this scenario would be impossible. Instead, what truly matters is responsible management: paying on time, keeping balances low, and using credit strategically.
The slight short-term decrease in your credit score after opening a new card is mostly due to the hard inquiry on your credit report. Whether you’re approved or denied, that inquiry stays on your report for roughly two years but typically affects your score most in the first few months.
Remember, payment history + amounts owed (utilization) combine for 65% of your score. That’s over six times the weight of hard inquiries alone (10%). So if you keep paying on time and maintain low balances, you’ll often see a net positive in your score—even if you have a short-term dip from applying for new cards.
Additionally, having more accounts can help your score in the long run, assuming you manage them responsibly. You can’t increase your total accounts (or credit mix) without incurring new hard inquiries at some point—so a small, temporary score drop can be a worthwhile trade-off for the long-term benefits.
IMPORTANT CAVEATS
If you’re about to apply for a major loan (e.g., mortgage, auto loan, or business loan), you may want to hold off on applying for more credit cards until after you secure that loan. Lenders in these situations are typically more sensitive to recent hard inquiries, and this can negatively affect the rates or terms you qualify for. Normally, it’s recommended to have no hard inquiries on your credit report for 6–12 months before applying for major loans.
Additionally, you should always avoid holding a balance month over month or paying interest, as this will negate any rewards that you receive by using a credit card. If you can’t trust yourself to use credit cards responsibly, then you should NOT be applying for new cards, and it may be better for you to use a debit card for all of your purchases.
Action Steps for Building a Strong Credit Score
We realize this is a lot of information to digest. You might be thinking, “Now what…?”
Here are a few concrete action steps to focus on:
1. Set Up Auto-Pay for Every Card
Schedule auto-pay for at least the minimum payment—though paying the full statement balance every month is ideal. This helps you avoid accidental late payments.
While a perfect 100% payment history is always the ultimate goal, 99% is still considered good—whereas 98% or less can begin to significantly impact your credit score.
2. Keep Your Utilization Low
If you have high balances on your personal cards, pay them off ASAP and keep them down. Aim to keep your utilization rate under 5% at all times. If you frequently make large business purchases, switch those expenses to a business credit card since those don’t report to your credit report (with the exception of certain issuers like Capital One).
3. Check For and Resolve Any Derogatory Marks
First, confirm whether you have any by reviewing your Credit Karma or full credit reports. If you do, contact the creditor or collection agency to negotiate removal upon full payment (pay for delete). Learn more here. Ultimately, aim to have 0 Derogatory Marks.
4. Review All Of Your Other Factors
It’s crucial to know where you stand currently with all of the factors that we’ve mentioned. To see your own numbers for these factors, go to your Credit Karma account dashboard (also called “Today”), click on your Transunion or Equifax score, and then scroll down to see “Credit Factors”. In addition to reviewing the three factors mentioned above, also make sure to check the remaining three.
• Length of Credit History: Keep old accounts open to maintain a higher average age.
• Total Accounts / Credit Mix: Opening new credit lines can help diversify—but only do so if you can manage them responsibly.
• Hard Inquiries: Space out applications. Short-term dips can be worth the long-term benefit of more available credit if you’re not planning a major loan soon.
Bonus Strategy: Become an Authorized User
Being added to someone else’s well-managed credit card can boost your credit score. Essentially, all of the metrics and history from that card will appear on your credit report when you’re added to it as an authorized user.
• Here’s what to do:
- Choose a trusted family member or close friend who has excellent credit habits and holds a card which they can add you on.
- Ensure it’s a personal card that reports to the credit bureaus.
- Look for a card that has:
- Long credit history (ideally several years)
- Perfect payment history (0 late payments)
- A high credit limit
- Low (or zero) ongoing balance
- Request to be added as an authorized user. You don’t even need to use the card yourself; just benefiting from their track record and having it appear on your credit report can help improve your score.
Keep in mind that being added to a card that has negative history such as past late payments or a high utilization rate will likely damage your credit score, so make sure to choose wisely and be extremely diligent if you decide to pursue this option.
The Long-Term Perspective + Recap
Building a great credit score is a long game, but these incremental steps will pave the way for consistent improvement:
• On-Time Payments: Never miss a due date.
• Low Utilization: Stay under 5% if you can.
• Strategic Applications: Apply for new credit sparingly and intentionally.
• Account Aging: Keep older, positive accounts open.
• Authorized Users: Leverage others’ good credit when it’s safe and appropriate to do so.
Final Takeaway
Credit scores aren’t just about how many cards you hold; they’re about how you use them. By following the action steps above, you’ll be well on your way to a robust credit profile that serves you well for years to come. Remember, while hard inquiries might sting briefly, they’re a small price to pay compared to the significant, long-term benefits of a strong credit foundation.
