FAQ - Credit Scores & Credit Reports

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What Are the Different Credit Score Ranges?​

Credit scores in the United States typically range from 300 to 850. A higher score indicates better creditworthiness according to Experian.
  • FICO Score Ranges:
    • 300 - 579: Poor
    • 580 - 669: Fair
    • 670 - 739: Good
    • 740 - 799: Very Good
    • 800 - 850: Exceptional
  • VantageScore 3.0 (from Equifax):
    • 300 - 599: Poor
    • 600 - 660: Fair
    • 661 - 715: Good
    • 716 - 747: Very Good
    • 748 - 850: Excellent
Some notes:
1. It's important to note that different credit bureaus and scoring models may have slightly different ranges.
2. It is very important to specify which version of the Vantage score is being used, because they have changed over time.
3. When reviewing your credit score, always pay attention to the specific scoring model and range provided by the source.

What impacts my credit score?​

Several factors impact your credit score, primarily revolving around your credit history according to Experian. The most significant are:
  • Payment History (35%): This is the most crucial factor, reflecting whether you pay your bills on time. Late payments significantly lower your score.
  • Amounts Owed (30%): This considers your credit utilization, or how much of your available credit you're using. High utilization can negatively impact your score.
  • Length of Credit History (15%): A longer credit history generally indicates lower risk, so older accounts in good standing can boost your score.
  • New Credit (10%): Opening many new accounts in a short period can lower your score, as it may signal increased risk.
  • Credit Mix (10%): Having a mix of different credit types (e.g., credit cards, installment loans) can positively affect your score.

How Can I Obtain My Free Annual Credit Report?​

You're entitled to one free credit report per year from each of the three major credit bureaus. To access these reports, visit AnnualCreditReport.com. This site is authorized by federal law to provide free credit report.

How Long Does It Take to Receive My Free Credit Report After Ordering?​

You can access your free credit report immediately online at https://www.annualcreditreport.com. If you request it by phone or mail, it will be mailed to you within 15 days. Reports in alternative formats, such as Braille, large print, or audio, take approximately three weeks

How Often Is My Loan Information Reported to Credit Bureaus?​

Most lenders report loan information to credit bureaus monthly, often tied to your billing cycle. However, the exact frequency varies depending on the lender's policies and the status of your account. Therefore, while monthly is typical, it's not a universal guarantee.

What Is a Good Credit Utilization Ratio and Debt-to-Income (DTI) Ratio?​

  • Credit Utilization Ratio: This ratio compares your current credit card balances to your total credit limits. It's recommended to keep this ratio below 30% to maintain a healthy credit score according to Lendingtree.
  • Debt-to-Income (DTI) Ratio: This ratio measures your monthly debt payments relative to your gross monthly income. Lenders prefer a DTI ratio below 36%, though some may allow up to 43% or higher, depending on the loan type and other factors.

What's the Difference Between Hard and Soft Credit Inquiries?​

  • Hard Inquiries: These occur when a lender reviews your credit report as part of a credit application. They can affect your credit score and remain on your report for two years.
  • Soft Inquiries: These occur when you check your own credit or when a lender pre-approves you for an offer without a formal application. Soft inquiries do not impact your credit score.

How Long Do Negative Items Remain on a Credit Report?​

  • Late Payments and Other Negative Items: Typically remain on a credit report for 7 years.
  • Chapter 7 Bankruptcy: Remains on a credit report for 10 years.

What Are the Major Credit Bureaus?​

In the United States, there are three primary credit bureaus:
  • Equifax
  • Experian
  • TransUnion
These agencies collect and maintain consumer credit information used to generate credit reports.

How Long Do Hard Inquiries Remain on My Credit Report?​

Hard inquiries, which occur when a lender checks your credit for a loan or credit application, remain on your credit report for two years. However, they typically impact your FICO score for only one year.

How Do New Credit Inquiries Affect My FICO Score?​

New credit inquiries account for 10% of your FICO score. While a single inquiry may have a minimal effect, multiple inquiries within a short period can have a more significant impact.

What is the difference between a credit score and a credit report?​

A credit report is a detailed history of your credit activity, while a credit score is a numerical summary of that history, used to assess your creditworthiness.
 
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