Read on to find out how to check and improve your credit score–everything you ever wanted to know . . . and then some.
What is a credit score?
What is the Credit Score Range?
What is a good credit score?
More than One Credit Score (e.g. FICO, VantageScore 3.0)
Most well-known credit score–FICO
The calculation breakdown:
- Payment history (35%)
- Amount owed (30%)
- Length of credit history (15%)
- New Credit (10%)
- Type of credit used (10%)
How to check your credit score for free
- Many credit cards offer free services that let you take a peek at either your FICO score or your VantageScore 3.0.
- Check your current credit card(s) and see if this is a service they offer.
- FICO Score
- FreeCreditScore.com – Run by Experian (one of the three major credit bureaus), FreeCreditScore.com updates your credit score monthly, calculated based on the FICO Score 8 model. It also provides your Experion credit report as well. They try to upsell you with credit monitoring, which you can decline.
- Discover offers FICO scores for customers
- VantageScore 3.0–You can get it for free at:
- Credit Karma: Scores from Equifax and TransUnion, updated weekly. They make their money from ads, so they’re able to offer both free credit advice and monitoring.
- Credit Sesame: Score from TransUnion, updated monthly. Their other free services include credit monitoring and alerts, credit and loan analysis.
- NerdWallet: One of my favorite financial education sites. Can monitor your credit and notify you of any changes.
- Capital One Credit Wise: Available for anyone, not just for customers. Alerts you for any changes to your Transunion credit report.
Will Checking My Credit Lower My Score?
No. Checking your score is what is called a soft inquiry. Too many hard inquiries–the ones made by potential lenders (e.g. applying for a credit card, home loan, car loan, etc.) can hurt your credit score.
How to Improve your Credit Score
- Pay your bills on time (including utility and cell phone payments)
- Since such a large portion of your score is based on your payment history (35%), this is the single best way to improve your score.
- Pay off debt and keep credit card balances low (ideally <10%)
- The amount of debt you owe is 30% of your score so pay off any outstanding debt and pay down your credit cards. NerdWallet recommends using no more than 30% of your credit limit on any card and even less, if possible. The best scores use 10% or less of their credit limit.
- Don’t close unused credit cards
- Unless it’s tempting you to spend more than you should, you are better off keeping your old accounts open as it can help your credit utilization ratio (your outstanding balances divided by the total amount of credit available). Your oldest account is the most important to keep open, as this ages your credit history–The older, the better.
- Cut Back on Applying for New Credit Accounts
- Applying for credit results in hard inquiries on your credit history, too many of which will hurt your score. New accounts also lower your average account age.
- Dispute any inaccuracies on your credit report
- Check your credit report and if anything is inaccurate, dispute it.
Will your spouse’s bad credit affect you?
Why Dave Ramsey says you can live without credit
Why I Recommend Having a Good Credit Score
- Save money with lower interest rates
- Better housing – You increase your chances of qualifying for an apartment rental or home purchase
- Job opportunities – Some employers pull a modified credit report to evaluate if you’re a theft or fraud risk
- Lower insurance rates
- Better cell phone deals – Lower to no deposits required
- Better credit cards with perks like cash-back – Even if you don’t want to accrue consumer debt, having access to a credit card will increase your ability to do things like travel or rent a car.