Freddie Mac CreditSmart Homebuyer U Practice Test 2025 – The Comprehensive All-in-One Guide to Achieve Exam Success!

Payment history, credit utilization, and length of credit history are critical factors that contribute significantly to your credit score.

Payment history is the most influential component, accounting for a large percentage of your overall score. It reflects whether you've paid your bills on time, which demonstrates your reliability as a borrower. Missed payments can have a substantial negative impact on your credit score.

Credit utilization measures how much of your available credit you are using, expressed as a percentage. A lower utilization ratio suggests to creditors that you are managing your credit responsibly, while a higher ratio may indicate a heightened risk of default, which can decrease your score.

Length of credit history considers how long your credit accounts have been active. Generally, a longer credit history is favorable because it provides a more extensive record of your borrowing behavior, helping lenders assess your creditworthiness more accurately.

In contrast, the other factors listed in the other choices—like employment history, income level, home ownership, and others—do not directly influence credit scores in the same way. While those factors can impact your overall financial health and ability to repay loans, they are not part of the criteria used to calculate your credit score.