What’s in a number? Understand the importance of your credit score – starting with how to find it.
Your credit score isn’t just a tool that helps lenders determine how much risk they take on when they lend to you, it can also affect rental applications and even insurance rates. In this guide we’ll show you where you can find your credit score and what goes into calculating it.
What is a credit score?
A credit score is a summary of your credit history expressed as a number ranging from 300 to 850. While several different credit bureaus offer credit scores, the most widely known type of credit score is developed by FICO (Fair Isaac Corporation). It’s a risk-based system that calculates the possibility of you defaulting on your next loan – the lower your score, the higher the possibility you’ll default.
|Credit quality||Approval odds||Recommended credit card issuers|
|Well below average||First Progress Platinum Elite MasterCard, USAA Secured Card Visa Platinum, First Progress Platinum Secured MasterCard, UNITY Visa Secured Credit Card, USAA Secured Card American Express®, Fingerhut Credit Account, AccountNow Prepaid Debit Cards|
|Below average||Credit One Bank® Cash Back Rewards Visa®, Credit One Bank® NASCAR®, Credit One Bank Platinum Visa|
|Above average||Chase Sapphire Preferred, BankAmericard Travel Rewards, Southwest Airlines Rapid Rewards Premier, Starwood Preferred Guest American Express|
|Well above average||Barclaycard Arrival Plus World Elite MasterCard, Barclaycard CashForward World MasterCard|
What are the credit score tiers and ranges?
Identifying your credit score range can be quite difficult. This is because financial institutions determine ranges differently. As a result, with one bank, your FICO score could place you in their “Excellent” bracket, while the same score might place you in the “Good” range with a different bank.
The table below shows credit score ranges/tiers reported by several financial services websites:
|Site||Credit Score Tier 1||Credit Score Tier 2||Credit Score Tier 3||Credit Score Tier 4||Credit Score Tier 5|
|CafeCredit||Bad – 300-639||Fair – 640-679||Good – 680-719||Best – 720-850||N/A|
|CreditKarma||Poor – 549 or lower||Fair – 550-639||Good – 640-719||Excellent – 720 or higher||N/A|
|Credit Sesame||Very Poor – 499 or lower||Poor – 500-549||Fair – 550-639||Good – 640-719||Excellent – 720-850|
|Experian||Poor – 579 or lower||Fair – 580-669||Good – 670-739||Very Good – 740-799||Exceptional – 800 or higher|
|NerdWallet||Poor – 350-629||Average – 630-689||Good – 690-719||Excellent – 720-850||N/A|
|WalletHub||Bad – 300-619||Fair – 620-659||Good – 660-719||Excellent – 720-850||N/A|
Source: https://www.creditkarma.com, https://www.nerdwallet.com, http://www.experian.com, https://www.creditsesame.com, https://wallethub.com, https://www.cafecredit.com.
Do you only have one credit score?
You have multiple credit scores, as each one is calculated differently depending on the credit reporting agency. Companies can request your score from any of these agencies, and so can get a different score. However, you will always have the same history. If there are no errors listed on your file, your shouldn’t have a good score with one agency and a bad score with another.
Where can I get my credit score?
There are various ways to get your credit score:
- Your account statement. Some banks and financial institutions list your credit score on your credit card or loan account statement. Check your statement to see if this is a service offered to you.
- Credit score services. There are many free credit score services that don’t require your credit card details. Credit Sesame is one such provider, offering your credit score for free. You can also get your credit report below. Keep in mind these free services don’t provide you with your FICO score; you will instead get a score based on a non-FICO scoring model.
- Credit bureaus. You can find out your credit score and purchase score-monitoring services directly from FICO, Experian, TransUnion and or Equifax.
- Credit or housing counsellors. If you are in need of financial counseling, credit and housing counsellors can provide you with a copy of your credit report and credit score for free.
What makes up your FICO credit score?
As the most common type of credit score, it’s important to know the FICO score is calculated. There are five components which make up your FICO credit score, with each of them weighted differently:
- Payment history – 35%. Your payment history refers to whether you made payments on your credit account on time or whether you have any defaults, liens, lawsuits or bankruptcies listed on your records. If you do make a payment late, how much it affects your score will depend on how late the payment is, how much is owed, how recently it occurred and how many late payments you’ve made.
- Credit utilization – 30%. This is the total amount of your credit card balances divided by your total credit card limits. It makes up 30% of your FICO score, and 30% is the credit card utilization percentage you should aim for.
- Length of credit history – 15%. How long is your credit history? When did you first apply for a credit card or loan? The further back your history goes the better off you may be. If you have a short history, or no history at all, you may find it just as hard as someone with bad credit to be approved for a loan.
- Type of credit in use – 10%. The type of credit accounts you have also have an affect on your FICO score. Whether or not your credit accounts are open won’t matter because the fact you held them will still potentially affect your score.
- New credit – 10%. The number of credit inquiries you’ve made recently and over the past year will affect your score. It’s generally not advised to make multiple inquiries over a short space of time.
Those three digits can make a big impact on your life – good and bad – so they’re worth keeping an eye on. Monitor your credit score carefully and you may just help edge it closer to the 850 mark.
Need to repair your credit? Compare prices of services who might be able to help:
|Company Name:||Phone Number:||Cost of Service|
|CuraDebt: Tax Debt Relief Free Consultation||On average, are 20% of the total debt amount enrolled.|
|Lexington Law||$119.95 one-time First Work Fee, $119.95/Month.|
|CreditRepair.com||$99.95 per month, plus a 1 time charge of $14.99 to obtain your credit reports.|
|The Credit Pros: Legal Credit Repair||$179 per individual and $279 per couple for the first payment.|
|Debt.com||Varies by service.|
Frequently asked questions
Do married couples have a joint-FICO score?
No. Each party has their own individual credit score. If you blend your finances, your spouse’s credit habits may affect your creditworthiness.
How long will negative information stay on my report?
It usually takes seven years for negative information to leave your credit report. In the case of bankruptcy, it will take 10 years.
How often does my credit score change?
Every time your report changes, your score changes. New information is added with every payment (or missed payment), so it’s pretty consistently changing.