What a credit score is
Lenders and other permitted users use scoring models to estimate the likelihood of repayment. Scores can influence approval, interest rates, limits, and other terms. Different models, report data, product types, and dates can produce different scores.
Credit report versus credit score
A credit report contains information about credit accounts and payment history. A score is a calculated number based on information in a report. Correcting a report error can therefore matter even if you are focused on the score.
Factors scoring models commonly consider
- Bill-paying history, including late payments.
- Current unpaid debt and credit utilization.
- Number, type, and age of accounts.
- Recent applications for credit.
- Collections, foreclosures, bankruptcies, and how long ago they occurred.
Exact weights vary by model, so beware of anyone promising a guaranteed number of points from one action.
Habits that support healthier credit
- Pay every bill on time; use reminders or automatic payments when appropriate.
- Keep revolving balances low relative to available credit.
- Apply only for credit you need.
- Think before closing an old account because utilization and account age may change.
- Review reports for inaccurate or unfamiliar information.
Check reports and dispute errors
The CFPB directs consumers to AnnualCreditReport.com for official free reports. Look for accounts you do not recognize, incorrect late payments, duplicate items, and wrong personal information. Follow the report's dispute instructions and keep copies of supporting records.