{"id":1349,"date":"2023-11-27T22:05:51","date_gmt":"2023-11-27T22:05:51","guid":{"rendered":"https:\/\/vaultmedia.com\/?p=1349"},"modified":"2023-12-23T13:32:40","modified_gmt":"2023-12-23T18:32:40","slug":"what-is-a-credit-score","status":"publish","type":"post","link":"https:\/\/vaultmedia.com\/what-is-a-credit-score\/","title":{"rendered":"What is a Credit Score? Demystifying the Murky World of Credit Scoring"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#Quick_takeaways\" title=\"Quick takeaways:\">Quick takeaways:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#What_is_a_credit_score\" title=\"What is a credit score?\">What is a credit score?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#How_to_get_a_free_credit_score_report\" title=\"How to get a free credit score report\">How to get a free credit score report<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#Why_you_may_have_different_credit_scores\" title=\"Why you may have different credit scores\">Why you may have different credit scores<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#Whats_a_good_credit_score_Credit_score_ranges\" title=\"What&#8217;s a good credit score? (Credit score ranges)\">What&#8217;s a good credit score? (Credit score ranges)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#What_influences_your_credit_score\" title=\"What influences your credit score\">What influences your credit score<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#Factors_that_dont_affect_your_credit_score\" title=\"Factors that don&#8217;t affect your credit score\">Factors that don&#8217;t affect your credit score<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#Consequences_of_a_low_credit_score\" title=\"Consequences of a low credit score\">Consequences of a low credit score<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#Nine_ways_to_improve_your_credit_score\" title=\"Nine ways to improve your credit score\">Nine ways to improve your credit score<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#1_Pay_bills_on_time\" title=\"#1: Pay bills on time\">#1: Pay bills on time<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#2_Reduce_credit_card_balances\" title=\"#2: Reduce credit card balances\">#2: Reduce credit card balances<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#3_Avoid_opening_unnecessary_credit_accounts\" title=\"#3: Avoid opening unnecessary credit accounts\">#3: Avoid opening unnecessary credit accounts<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#4_Regularly_check_your_credit_report\" title=\"#4: Regularly check your credit report\">#4: Regularly check your credit report<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#5_Diversify_your_credit_mix\" title=\"#5: Diversify your credit mix\">#5: Diversify your credit mix<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#6_Maintain_a_long_credit_history\" title=\"#6: Maintain a long credit history\">#6: Maintain a long credit history<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#7_Negotiate_with_creditors\" title=\"#7: Negotiate with creditors\">#7: Negotiate with creditors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#8_Become_an_authorized_user\" title=\"#8: Become an authorized user\">#8: Become an authorized user<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#9_Seek_professional_assistance\" title=\"#9: Seek professional assistance\">#9: Seek professional assistance<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#Achieving_a_good_credit_score_%E2%80%93_Frequent_questions_FAQ\" title=\"Achieving a good credit score &#8211; Frequent questions (FAQ)\">Achieving a good credit score &#8211; Frequent questions (FAQ)<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#Can_I_harm_my_credit_score_by_checking_it\" title=\"Can I harm my credit score by checking it?\">Can I harm my credit score by checking it?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#What_score_do_I_need_to_qualify_for_a_credit_card\" title=\"What score do I need to qualify for a credit card?\">What score do I need to qualify for a credit card?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#Whats_the_easiest_way_to_find_my_credit_score_for_free\" title=\"What&#8217;s the easiest way to find my credit score for free?\">What&#8217;s the easiest way to find my credit score for free?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#How_long_does_negative_information_impact_my_credit_score\" title=\"How long does negative information impact my credit score?\">How long does negative information impact my credit score?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#Can_I_achieve_a_perfect_credit_score\" title=\"Can I achieve a perfect credit score?\">Can I achieve a perfect credit score?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/vaultmedia.com\/what-is-a-credit-score\/#What_is_a_credit_score_%E2%80%93_Final_thoughts\" title=\"What is a credit score &#8211; Final thoughts\">What is a credit score &#8211; Final thoughts<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Quick_takeaways\"><\/span>Quick takeaways:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul>\n<li>The credit score represents someone&#8217;s credit risk and is a key determinant of the financial opportunities available to them<\/li>\n\n\n\n<li>Generally speaking, a credit score above 660 is considered good.<\/li>\n\n\n\n<li>Factors that can enhance or hurt your credit score include payment history, the amount owed, length of credit history, credit mix, and new credit; however, it&#8217;s not influenced by net worth, income, employment history, or any demographic traits.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img decoding=\"async\" width=\"998\" height=\"500\" src=\"https:\/\/vaultmedia.com\/wp-content\/uploads\/2023\/11\/image-1.png\" alt=\"What is credit score? Understand your credit score\" class=\"wp-image-1354\" style=\"width:732px;height:auto\" srcset=\"https:\/\/vaultmedia.com\/wp-content\/uploads\/2023\/11\/image-1.png 998w, https:\/\/vaultmedia.com\/wp-content\/uploads\/2023\/11\/image-1-300x150.png 300w, https:\/\/vaultmedia.com\/wp-content\/uploads\/2023\/11\/image-1-768x385.png 768w\" sizes=\"(max-width: 998px) 100vw, 998px\" \/><\/figure><\/div>\n\n\n<p>Your credit score can make or break your application for credit cards, loans, mortgages, housing, and even job opportunities.<\/p>\n\n\n\n<p>In addition, it may dictate the amount of credit, repayment terms, and interest rates available to you.<\/p>\n\n\n\n<p>But how exactly is it calculated? And, most importantly, what practical steps can you take to improve your score? In this post, we&#8217;ll cover all that and more!<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"What_is_a_credit_score\"><\/span>What is a credit score?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The credit score is an indicator of someone&#8217;s creditworthiness. It gives lenders an assessment of the risk of lending money to that person.<\/p>\n\n\n\n<p>It typically ranges from 300 to 850 and is based on an analysis of various financial factors, including payment history, outstanding debts, length of credit history, types of credit accounts, and recent credit inquiries.<\/p>\n\n\n\n<p>The higher the score, the lower the perceived risk for lenders.<\/p>\n\n\n\n<p>Whether you&#8217;re applying for a mortgage, seeking an auto loan, or even renting an apartment, building a good credit score can help you qualify for better financial opportunities.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"How_to_get_a_free_credit_score_report\"><\/span>How to get a free credit score report<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Some credit card companies provide your credit score on monthly statements or through online account portals.<\/p>\n\n\n\n<p>Additionally, many credit monitoring services and third-party websites like <em>Credit Karma<\/em> offer free access to your score to help you track changes over time.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large is-resized\"><img decoding=\"async\" width=\"1024\" height=\"497\" src=\"https:\/\/vaultmedia.com\/wp-content\/uploads\/2023\/11\/image-2-1024x497.png\" alt=\"An image of a website displaying a free credit score.\" class=\"wp-image-1390\" style=\"width:696px;height:auto\" srcset=\"https:\/\/vaultmedia.com\/wp-content\/uploads\/2023\/11\/image-2-1024x497.png 1024w, https:\/\/vaultmedia.com\/wp-content\/uploads\/2023\/11\/image-2-300x145.png 300w, https:\/\/vaultmedia.com\/wp-content\/uploads\/2023\/11\/image-2-768x372.png 768w, https:\/\/vaultmedia.com\/wp-content\/uploads\/2023\/11\/image-2-1536x745.png 1536w, https:\/\/vaultmedia.com\/wp-content\/uploads\/2023\/11\/image-2.png 1891w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure><\/div>\n\n\n<p>Furthermore, you&#8217;re entitled to one free credit report every 12 months from each of the three major credit bureaus: Equifax, Experian, and TransUnion. While the information in your credit reports often doesn&#8217;t include your score, they provide detailed information about your credit history.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_you_may_have_different_credit_scores\"><\/span>Why you may have different credit scores<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Lenders and financial institutions often use different credit scoring models, which apply slightly distinct factors and algorithms to calculate someone&#8217;s creditworthiness.<\/p>\n\n\n\n<p>In the U.S., the two most widely used are <strong>FICO\u00ae Score<\/strong> and <strong>VantageScore<\/strong>. Each model might also have multiple versions, contributing to score variations.<\/p>\n\n\n\n<p>Additionally, there may be discrepancies based on the credit bureau&#8217;s data. For example, your FICO Score from Equifax might differ from the one from TransUnion due to variations in the credit reports maintained by each bureau.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Whats_a_good_credit_score_Credit_score_ranges\"><\/span>What&#8217;s a good credit score? (Credit score ranges)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Each scoring model uses a different range for determining how good your score is.<\/p>\n\n\n\n<p>Here are Fico and VantageScore credit score ranges compared:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Category<\/strong><\/td><td><strong>Fico Credit Score<\/strong><\/td><td><strong>VantageScore<\/strong><\/td><\/tr><tr><td><strong>Excellent<\/strong><\/td><td>800-850<\/td><td>781-850<\/td><\/tr><tr><td><strong>Good<\/strong><\/td><td>670-799<\/td><td>661-780<\/td><\/tr><tr><td><strong>Fair<\/strong><\/td><td>580-669<\/td><td>601-660<\/td><\/tr><tr><td><strong>Poor or very poor<\/strong><\/td><td>300-579<\/td><td>300-600<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>People with <strong>excellent<\/strong> credit scores are likely to qualify for the <a href=\"https:\/\/vaultmedia.com\/should-i-refinance-my-mortgage-now\">best interest rates<\/a> and loan terms.<\/p>\n\n\n\n<p>A <strong>good<\/strong> score also indicates strong creditworthiness, and borrowers in this range might as well qualify for favorable or reasonable terms.<\/p>\n\n\n\n<p>Those with <strong>fair<\/strong> credit may face higher interest rates and find it more challenging to qualify for certain loans.<\/p>\n\n\n\n<p>And, for those with a <strong>poor<\/strong> credit score, subprime or high-risk loans may be the only options, and interest rates can be very high.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"684\" src=\"https:\/\/vaultmedia.com\/wp-content\/uploads\/2023\/11\/Depositphotos_298097734_L-1024x684.jpg\" alt=\"A man in a suit is holding up a paper with a credit score on it.\" class=\"wp-image-1503\" srcset=\"https:\/\/vaultmedia.com\/wp-content\/uploads\/2023\/11\/Depositphotos_298097734_L-1024x684.jpg 1024w, https:\/\/vaultmedia.com\/wp-content\/uploads\/2023\/11\/Depositphotos_298097734_L-300x200.jpg 300w, https:\/\/vaultmedia.com\/wp-content\/uploads\/2023\/11\/Depositphotos_298097734_L-768x513.jpg 768w, https:\/\/vaultmedia.com\/wp-content\/uploads\/2023\/11\/Depositphotos_298097734_L-1536x1025.jpg 1536w, https:\/\/vaultmedia.com\/wp-content\/uploads\/2023\/11\/Depositphotos_298097734_L.jpg 2000w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"What_influences_your_credit_score\"><\/span>What influences your credit score<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There are five factors in determining your credit score:<\/p>\n\n\n\n<ol>\n<li><strong>Payment history (35<\/strong>%<strong>):<\/strong> That includes whether you&#8217;ve paid your bills on time, any late payments, how late they were, and whether you&#8217;ve had any accounts sent to collections or declared bankruptcy.<\/li>\n\n\n\n<li><strong>Amount owed (30%):<\/strong> Also known as credit utilization, this factor considers how much of your available credit limit you&#8217;re using.<\/li>\n\n\n\n<li><strong>Length of credit history (15%):<\/strong> It considers the age of your oldest and newest accounts and the average age of all your credit accounts. A longer credit history is seen as less risky, as creditors can use more data to determine your payment history.<\/li>\n\n\n\n<li><strong>Credit mix (10%):<\/strong> This considers the variety of credit accounts you have, such as credit cards, installment loans, mortgages, etc. Having a mix of different types of credit can be viewed positively, as it suggests responsible management.<\/li>\n\n\n\n<li><strong>New credit (10<\/strong>%<strong>):<\/strong> This factor looks at how many recently opened accounts you have and how many recent inquiries there are on your credit report. Opening multiple new credit accounts quickly can be viewed as high risk, as it signals you may be desperate financially.<\/li>\n<\/ol>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Factors_that_dont_affect_your_credit_score\"><\/span>Factors that don&#8217;t affect your credit score<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Contrary to popular belief, your credit score isn&#8217;t influenced by factors like your net worth, income, employment history, and balances in retirement accounts. However, they can still play a role in creditors&#8217; decision to lend you money.<\/p>\n\n\n\n<p>Additionally, it isn&#8217;t affected by demographic traits like religion, race, nationality, age, or marital status.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Consequences_of_a_low_credit_score\"><\/span>Consequences of a low credit score<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ol>\n<li><strong>Higher Interest Rates:<\/strong> <a href=\"https:\/\/vaultmedia.com\/should-i-refinance-my-mortgage-now\">Lenders tend to charge higher interest rates<\/a> to borrowers with a lower credit score to compensate for their risk. This means you may pay more for loans and credit cards over time.<\/li>\n\n\n\n<li><strong>Difficulty Securing Loans or Credit:<\/strong> Lenders can be hesitant to approve applications from those perceived as high risk, making it difficult for them to qualify for credit cards, mortgages, or <a href=\"https:\/\/vaultmedia.com\/1000-down-payment-cars-with-no-credit-check\">car loans<\/a>.<\/li>\n\n\n\n<li><strong>Impact on Housing:<\/strong> Landlords and property management companies may check your creditworthiness as part of the rental application process, influencing your ability to secure housing.<\/li>\n\n\n\n<li><strong>Higher Insurance Premiums:<\/strong> A lower rating may result in higher insurance costs, as some companies use credit scores to determine auto and homeowners insurance premiums.<\/li>\n\n\n\n<li><strong>Difficulty Getting a Job:<\/strong> While not universal, some employers may check credit scores during hiring, especially for positions involving financial responsibilities.<\/li>\n\n\n\n<li><strong>Security Deposits:<\/strong> A poor credit score may lead to higher security deposit requirements when setting up utility services or renting.<\/li>\n<\/ol>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"766\" src=\"https:\/\/vaultmedia.com\/wp-content\/uploads\/2023\/11\/Depositphotos_84014550_L-1024x766.jpg\" alt=\"A person pointing at a magnifying glass with the word credit score.\" class=\"wp-image-1502\" srcset=\"https:\/\/vaultmedia.com\/wp-content\/uploads\/2023\/11\/Depositphotos_84014550_L-1024x766.jpg 1024w, https:\/\/vaultmedia.com\/wp-content\/uploads\/2023\/11\/Depositphotos_84014550_L-300x225.jpg 300w, https:\/\/vaultmedia.com\/wp-content\/uploads\/2023\/11\/Depositphotos_84014550_L-768x575.jpg 768w, https:\/\/vaultmedia.com\/wp-content\/uploads\/2023\/11\/Depositphotos_84014550_L-1536x1150.jpg 1536w, https:\/\/vaultmedia.com\/wp-content\/uploads\/2023\/11\/Depositphotos_84014550_L.jpg 1999w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Nine_ways_to_improve_your_credit_score\"><\/span>Nine ways to improve your credit score<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Pay_bills_on_time\"><\/span>#1: Pay bills on time<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Consistently paying bills by their due dates is crucial for building good credit. Consider setting up automatic payments for recurring bills to ensure they&#8217;re deducted from your account on the due date and reduce the risk of forgetting or missing payments.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Reduce_credit_card_balances\"><\/span>#2: Reduce credit card balances<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Credit bureaus reward credit card holders with lower balances, especially in relation to their credit limits. Aim to keep your credit utilization rate low by paying down outstanding balances and avoiding <a href=\"https:\/\/vaultmedia.com\/how-to-pay-off-credit-card-debt-fast\" data-type=\"link\" data-id=\"https:\/\/vaultmedia.com\/how-to-pay-off-credit-card-debt-fast\">credit card debt<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Avoid_opening_unnecessary_credit_accounts\"><\/span>#3: Avoid opening unnecessary credit accounts<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Each new loan or credit card can result in a <em>hard inquiry<\/em> on your credit report, potentially lowering your score. Only create new credit cards and accounts when necessary to avoid unnecessary impacts.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_Regularly_check_your_credit_report\"><\/span>#4: Regularly check your credit report<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Monitoring your credit report allows you to identify errors or unauthorized activities that may affect your score and report them promptly.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5_Diversify_your_credit_mix\"><\/span>#5: Diversify your credit mix<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Having a mix of credit modalities, such as credit cards, installment loans, and retail accounts, can positively impact your credit score as it showcases your ability to manage various types of credit responsibly.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"6_Maintain_a_long_credit_history\"><\/span>#6: Maintain a long credit history<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The length of your credit history also influences your score. Aim to keep longstanding credit accounts open, as they contribute positively to your credit history and overall score.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"7_Negotiate_with_creditors\"><\/span>#7: Negotiate with creditors<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>If you&#8217;re facing financial challenges, some creditors may be willing to adjust terms or offer hardship programs, helping you avoid late payments and prevent negative impacts on your credit.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"8_Become_an_authorized_user\"><\/span>#8: Become an authorized user<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Being added as an authorized user on someone else&#8217;s credit account can help you get a high credit score. However, ensure the primary account holder maintains good credit habits.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"9_Seek_professional_assistance\"><\/span>#9: Seek professional assistance<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Finally, if you&#8217;re still struggling with credit issues, consider seeking assistance from credit counseling agencies. They can provide guidance on managing debt, creating a budget, and improving your overall financial situation.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Achieving_a_good_credit_score_%E2%80%93_Frequent_questions_FAQ\"><\/span>Achieving a good credit score &#8211; Frequent questions (FAQ)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Can_I_harm_my_credit_score_by_checking_it\"><\/span>Can I harm my credit score by checking it?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>No, checking your credit score won&#8217;t influence it, as it&#8217;s considered a <em>soft inquiry<\/em> or <em>soft pull<\/em>. This inquiry type is only visible to you and doesn&#8217;t impact your creditworthiness.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_score_do_I_need_to_qualify_for_a_credit_card\"><\/span>What score do I need to qualify for a credit card?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>There&#8217;s no minimum credit score for applying for credit cards, as it can vary depending on the type of card and the credit card issuer. In general, if your score is considered poor or very poor, you&#8217;ll have fewer options and get a smaller credit limit and higher interest rates.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Whats_the_easiest_way_to_find_my_credit_score_for_free\"><\/span>What&#8217;s the easiest way to find my credit score for free?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>One of the easiest ways to find your credit score for free is through <a href=\"https:\/\/www.creditkarma.com\/free-credit-score\" data-type=\"link\" data-id=\"https:\/\/www.creditkarma.com\/free-credit-score\" target=\"_blank\" rel=\"noopener\">Credit Karma<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_long_does_negative_information_impact_my_credit_score\"><\/span>How long does negative information impact my credit score?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Detrimental data can affect your credit score for varying durations. For instance, late payments may stay on your report for seven years, while bankruptcies can linger for ten.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Can_I_achieve_a_perfect_credit_score\"><\/span>Can I achieve a perfect credit score?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Although achieving a perfect score of 850 is theoretically possible, it&#8217;s exceptionally rare. While pursuing an excellent rating is commendable, the benefits of having an above-average credit score are similar to those of a perfect one.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><span class=\"ez-toc-section\" id=\"What_is_a_credit_score_%E2%80%93_Final_thoughts\"><\/span>What is a credit score &#8211; Final thoughts<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A good or excellent credit score is key for unlocking doors to better loan terms, credit opportunities, and financial stability.<\/p>\n\n\n\n<p>By implementing measures like paying bills on time and keeping your credit card balances low, you can achieve a higher credit score and ensure a stronger, more secure financial future.<\/p>\n\n\n\n<p>And remember: building credit trustworthiness is a gradual process. Be patient, stay consistent with healthy financial habits, and monitor your progress regularly to improve your score.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Quick takeaways: Your credit score can make or break your application for credit cards, loans, mortgages, housing, and even job opportunities. In addition, it may dictate the amount of credit, repayment terms, and interest rates available to you. But how exactly is it calculated? And, most importantly, what practical steps can you take to improve<\/p>\n","protected":false},"author":5,"featured_media":1504,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[60],"tags":[],"ppma_author":[375],"authors":[{"term_id":375,"user_id":5,"is_guest":0,"slug":"pedro","display_name":"Pedro Tilki","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/b0dd6bef810ea0737bf214eab8b646b3?s=96&d=mm&r=g","user_url":"","last_name":"Tilki","first_name":"Pedro","description":"Pedro Tilki is a passionate writer and financial researcher dedicated to helping individuals achieve financial freedom and make informed decisions about their money."}],"_links":{"self":[{"href":"https:\/\/vaultmedia.com\/wp-json\/wp\/v2\/posts\/1349"}],"collection":[{"href":"https:\/\/vaultmedia.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vaultmedia.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vaultmedia.com\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vaultmedia.com\/wp-json\/wp\/v2\/comments?post=1349"}],"version-history":[{"count":1,"href":"https:\/\/vaultmedia.com\/wp-json\/wp\/v2\/posts\/1349\/revisions"}],"predecessor-version":[{"id":3778,"href":"https:\/\/vaultmedia.com\/wp-json\/wp\/v2\/posts\/1349\/revisions\/3778"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vaultmedia.com\/wp-json\/wp\/v2\/media\/1504"}],"wp:attachment":[{"href":"https:\/\/vaultmedia.com\/wp-json\/wp\/v2\/media?parent=1349"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vaultmedia.com\/wp-json\/wp\/v2\/categories?post=1349"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vaultmedia.com\/wp-json\/wp\/v2\/tags?post=1349"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/vaultmedia.com\/wp-json\/wp\/v2\/ppma_author?post=1349"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}