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You may have access to your credit score for free through other means. Several credit card companies offer credit reporting and scoring as a benefit to cardholders. This is usually a free opt-in service.
The most widely used of them all is the FICO score. This is the one most people think of when they think of their credit score, mainly because it invented credit scoring for lending decisions. But even within FICO, there are many iterations, the latest being FICO 10.
There is the fairly-new-to-game VantageScore, also with several versions (the latest is 4.0). VantageScore looks a little different from the FICO score and is calculated somewhat differently. But it uses the information in your credit report come up with your score.
Then there are the lesser-known scores that are generated by other financial sites using their own algorithms. All should be somewhat similar since they will be mostly based on the same information, but you should also know that there are likely to be some differences.
Just remember that it is far easier to bring a score down than to bring it up; what this means is that mistakes will lower your score more quickly than good actions. If you do the things I have suggested and give yourself time (and have some patience), you will be rewarded with a score you can be proud of. And then you can get on with the more important things in life!
The FICO Score is used by lenders to help make accurate, reliable, and fast credit risk decisions across the customer lifecycle. The credit risk score rank-orders consumers by how likely they are to pay their credit obligations as agreed. The most widely used broad-based risk score, the FICO Score plays a critical role in billions of decisions each year.
A credit score is a number that rates your credit risk. It can help creditors determine whether to give you credit, decide the terms they offer, or the interest rate you pay. Having a high score can benefit you in many ways. It can make it easier for you to get a loan, rent an apartment, or lower your insurance rate.
Making sure your credit report is accurate ensures your credit score can be too. You can have multiple credit scores. The credit reporting agencies that maintain your credit reports do not calculate these scores. Instead, different companies or lenders who have their own credit scoring systems create them.
Your free annual credit report does not include your credit score, but you can get your credit score from several sources. Your credit card company may give it to you for free. You can also buy it from one of the three major credit reporting agencies. When you receive your score, you often get information on how you can improve it.
Checking your own credit score or credit report is a "soft" inquiry. It has no effect on your credit report or score, unlike when a potential lender checks because you've applied for credit."}},"@type": "Question","name": "How many points does my credit score go down for a hard inquiry?","acceptedAnswer": "@type": "Answer","text": "The impact of a hard inquiry on a credit score isn't the same for everyone. It can vary based on individual factors, but it shouldn't be more than five points.."]}]}] .cls-1fill:#999.cls-6fill:#6d6e71 Skip to contentThe BalanceSearchSearchPlease fill out this field.SearchSearchPlease fill out this field.BudgetingBudgeting Budgeting Calculator Financial Planning Managing Your Debt Best Budgeting Apps View All InvestingInvesting Find an Advisor Stocks Retirement Planning Cryptocurrency Best Online Stock Brokers Best Investment Apps View All MortgagesMortgages Homeowner Guide First-Time Homebuyers Home Financing Managing Your Loan Mortgage Refinancing Using Your Home Equity Today's Mortgage Rates View All EconomicsEconomics US Economy Economic Terms Unemployment Fiscal Policy Monetary Policy View All BankingBanking Banking Basics Compound Interest Calculator Best Savings Account Interest Rates Best CD Rates Best Banks for Checking Accounts Best Personal Loans Best Auto Loan Rates View All Small BusinessSmall Business Entrepreneurship Business Banking Business Financing Business Taxes Business Tools Becoming an Owner Operations & Success View All Career PlanningCareer Planning Finding a Job Getting a Raise Work Benefits Top Jobs Cover Letters Resumes View All MoreMore Credit Cards Insurance Taxes Credit Reports & Scores Loans Personal Stories About UsAbout Us The Balance Financial Review Board Diversity & Inclusion Pledge View All Follow Us
Budgeting Budgeting Calculator Financial Planning Managing Your Debt Best Budgeting Apps Investing Find an Advisor Stocks Retirement Planning Cryptocurrency Best Online Stock Brokers Best Investment Apps Mortgages Homeowner Guide First-Time Homebuyers Home Financing Managing Your Loan Mortgage Refinancing Using Your Home Equity Today's Mortgage Rates Economics US Economy Economic Terms Unemployment Fiscal Policy Monetary Policy Banking Banking Basics Compound Interest Calculator Best Savings Account Interest Rates Best CD Rates Best Banks for Checking Accounts Best Personal Loans Best Auto Loan Rates Small Business Entrepreneurship Business Banking Business Financing Business Taxes Business Tools Becoming an Owner Operations & Success Career Planning Finding a Job Getting a Raise Work Benefits Top Jobs Cover Letters Resumes More Credit Cards Insurance Taxes Credit Reports & Scores Loans Financial Terms Dictionary About Us The Balance Financial Review Board Diversity & Inclusion Pledge Credit Scores & Credit MonitoringWhat To Do About Bad Credit8 Reasons Your Credit Score May Have DroppedByLaToya Irby LaToya Irby Facebook Twitter LaToya Irby is a credit expert who has been covering credit and debt management for The Balance for more than a dozen years. She's been quoted in USA Today, The Chicago Tribune, and the Associated Press, and her work has been cited in several books.learn about our editorial policiesUpdated on May 31, 2022Reviewed byCharlene RhinehartIf you're in the habit of monitoring your credit score often or you signed up for credit score alerts, then you've seen how your credit score changes over time. While you're excited about an increase in your credit score, you'd be equally alarmed about a drop.
It's relatively easy to correct the impact of a high balance. Simply pay down the balance promptly, avoid making other credit card purchases, and wait for the updated balance to show on your credit report. This will help you recover the lost credit score points.
In the United States, there are two popular credit score brands that compete in the lending marketplace: FICO and VantageScore. A good credit score is pretty similar between FICO and VantageScore scoring models with a few key differences:
FICO is the oldest and most widely used credit score brand and uses a scoring range of 300 to 850. There are also industry-specific FICO scoring models that use a different scale. Auto FICO scores, for example, range from 250 to 900.
Regardless of the range, FICO Scores serve the same purpose. They help lenders predict the risk of a borrower defaulting on a loan. The higher your score, the lower the risk you represent to anyone who lends you money.
Although the FICO and VantageScore charts above display a general idea of how lenders may interpret different credit score ranges, lenders and other companies can, and often do, differ in their opinions of creditworthiness.
Your credit score arguably matters more on a mortgage application than with any other type of personal financing. With a mortgage, a good credit score might save you thousands of dollars in interest every year.
Now, imagine you work to improve your FICO Score to 680. With the higher score, you might qualify for an APR of 3.313%. Based on the lower rate, your monthly payment would be $1,535 for the same home. You would pay $202,726 in interest over your 30-year loan term. Because you improved your credit score from fair to good, you would save:
With a 670 credit score, the FICO Loan Calculator now estimates that you might qualify for an APR around 7.89%. Based on that rate, your monthly payment on the same $38,000 auto loan would be $768. You would pay $8,106 in total interest over the life of your loan.
Like other lenders, credit card issuers will consult your credit score to determine the risk of doing business with you before approving you for a new credit card. If you want to open a premium travel rewards credit card, you may need good and perhaps even excellent credit scores to qualify. For other types of credit cards, even some with 0% introductory APR offers, a good credit score may be sufficient to be approved for the card. 041b061a72