The content is accurate at the time of publication and is subject to change.

Credit scores tell people about your past borrowing behavior. It's a tool designed to help potential creditors, employers, landlords and others assess how likely you are to meet your financial obligations. Based on your credit history, it's made up of the following factors  - listed along with an approximate percentage of how much each one counts  in making up your total score:

  • Payment history - whether you make payments on time (35%)
  • Total debt load and debt-to-credit ratio - how much you owe to all your creditors combined and how much of your available credit is in use (30%)
  • Length of credit history - how long you have been using credit (15%)
  • Types of credit - a mix of credit is good, including unsecured cards, mortgages, student loans or car loans (10%)
  • New credit - having lots of brand-new credit accounts doesn't look as favorable (10%)

You actually have several different credit reports and scores. Each credit bureau keeps their own records, so you have a credit history and score with TransUnion, Experian, and Equifax. FICO calculates your credit score based on their own formula, which comes from a combination of information from different bureaus. Your credit score will fall somewhere between 300† and 850† - and higher is better.

Any score over 800† is considered excellent, while a score under 600† is considered subprime.

Regularly checking both your credit report and credit score is essential for maintaining a healthy financial profile. Frequent monitoring of credit reports allows consumers to catch errors or inaccuracies or detect fraudulent activities promptly. Moreover, frequent credit report checks offer valuable insights into your financial habits and credit utilization.

Once a year, you can check your credit report for free at annualcreditreport.com online, via phone or by mail, while checking your credit score is usually for a fee, except in some cases. Therefore, it might be more convenient to use dedicated credit monitoring services that allow you to easily access your credit score and report at any time, without having to wait for one through the credit bureaus.

The services like SoFi free Credit Score Monitoring and MyScoreIQ provide access to your credit scores and reports, as well as personalized credit improvement recommendations and financial insights.

tags : Credit Score Credit Report FICO Score

Disclaimer: This editorial content is not provided or commissioned by the banks or credit card issuer(s). Opinions expressed here are the author's alone, not those of the banks or credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the banks or credit card issuer(s). Reasonable efforts are made to present accurate info, however all info is presented without warranty. Consult with the issuing bank of the card or account for terms & conditions.
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