Which of the following factors contributes to a credit score?

Credit utilization is a crucial factor that contributes significantly to a credit score. It refers to the ratio of current credit card balances to the total credit limits across all cards. This ratio is an indicator of how much of your available credit you are using. Higher utilization rates can negatively impact a credit score because it may signal to lenders that a borrower is overextended or too reliant on credit, which can increase risk.

Maintaining a lower credit utilization ratio—ideally below 30%—demonstrates responsible credit management. Keeping balances low relative to credit limits indicates that you are not overly dependent on credit, which can have a positive impact on your creditworthiness.

The other options, such as investment types, annual income, and long-term savings plans, do not directly influence credit scores. While they may affect overall financial health and the ability to obtain credit, they are not components factored into the credit scoring models used by lenders. Hence, focusing on credit utilization provides a clearer picture of how consumers manage their credit, making it a key determinant in the calculation of credit scores.