Credit Scores 101: What Makes Up Your Credit Score and How a Loan Affects It

May 15, 2025

Understand Your Credit Score

If you’ve ever applied for a credit card, a car loan, or a mortgage, you’ve probably heard about your credit score. But what does that number really mean—and how does something like a small personal loan affect it?


At Portside Finance, we believe in making financial information simple and actionable. Whether you’re just starting your credit journey or working to improve your score, understanding how credit works is the first step.

A woman is sitting at a table using a laptop computer with a credit score of 751.

What Is a Credit Score?

Your credit score is a three-digit number that gives lenders an idea of how likely you are to repay borrowed money. The most common scoring model, FICO®, ranges from 300 to 850. The higher your score, the better your credit health.


This number is based on your credit report, which is a history of how you’ve handled credit accounts over time. That includes credit cards, student loans, auto loans, and personal loans.

A man is giving a piece of paper to a woman.

The Five Factors That Influence Your Score

Here’s a quick breakdown of what goes into your credit score:


1. Payment History (35%)
This is the most important factor. Lenders want to know you can make payments on time. Even one missed payment can hurt your score, while consistent on-time payments steadily boost it.

2. Credit Utilization (30%)
This applies mostly to credit cards. It measures how much of your available credit you’re using. For example, if your credit card limit is $1,000 and you owe $500, your utilization is 50%. Ideally, you want this number below 30%.

A group of people are signing a document in a living room.

3. Length of Credit History (15%)
The longer your accounts have been open, the better. It shows you have experience managing credit over time.

4. Credit Mix (10%)
Credit bureaus like to see that you can handle a mix of credit types—revolving accounts (like credit cards) and installment loans (like personal loans or car loans).

5. New Credit Inquiries (10%)
Applying for several new loans or credit cards in a short period can signal risk and may slightly lower your score.

A laptop computer is sitting on a red rug next to credit cards.

How a Small Loan Can Improve Your Score

Taking out a small personal loan—like the ones we offer at Portside Finance—can be a smart move, especially if you’re trying to build or repair your credit.



Here’s how:

  • Adds to Your Credit Mix: If you only have a credit card, adding an installment loan shows you can handle different types of credit.
  • Builds Payment History: Making consistent, on-time payments each month shows lenders you’re reliable.
  • Offers Predictable Terms: Unlike credit cards, installment loans have fixed monthly payments and a clear end date. That can make budgeting easier and reduce the risk of overextending yourself.
  • Can Lower Credit Utilization: If you use a personal loan to pay off high-interest credit card debt, you may reduce your utilization ratio—boosting your score in the process.
A person is using a pen to point at a graph on a piece of paper.

A Realistic Step Toward Stronger Credit

At Portside Finance, we keep our loan process simple. You can borrow between $500 and $5,000, with flexible repayment terms from 12 to 18 months. This size loan is manageable for most budgets and is a practical tool to help you establish or rebuild your credit profile.


The Bottom Line

Your credit score doesn’t change overnight, but every small step matters. A personal loan from Portside Finance can be more than just financial support during a tough time—it can be the start of a healthier credit future.


We’re here to help you take control of your finances with simple, transparent loan options and friendly service. If you’re ready to begin, stop by one of our offices in Jacksonville or North Port, Florida, or start your application online today.

A stack of papers and a credit card on a wooden table.
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A group of people are sitting at a table with papers and a laptop.
A person is holding a credit card in front of a laptop computer.
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