Credit Score 101

How can I check my credit score?

You can find many reliable options online to check your credit score, but CreditSoup offers a free service to check your score instantly on our website. There are no hidden costs and no subscriptions. It’s completely secure to check your score through CreditSoup and you don’t have to worry about your information being exposed to hackers or thieves.

All that you need to view your score through CreditSoup is your name, address, social security and a few other pieces of basic information. Checking your score online couldn’t be easier.

Will checking my score affect my credit?

Many people have a misconception that checking their score themselves will impact their credit. This is not the case. When you check your score yourself, this is considered a soft inquiry. Soft inquiries will never lower your score. However, when you apply for a loan or a credit card, a bank may do a hard inquiry. This may lower your score by a few points. Many people don’t realize the difference between hard and soft inquiries which is where the confusion comes from.

With CreditSoup’s free score check, you don’t have to worry about your credit being affected. Your score will not be impacted at all. When you check your score through our system, this is considered a soft inquiry and will never hurt your credit.

Why is it important to know your credit history?

There are many reasons you should know your credit history. One of the most important reasons is that by monitoring your credit history regularly you can prevent fraud and identity theft. If an identity thief has opened a new credit card using your information, you can catch it early by spotting it on your credit report. Most credit monitoring services allow you to view all accounts that have been opened under your name and social security number. Therefore it’s integral to monitor your accounts to make sure none of them are unfamiliar. You can save yourself a lot of hassle by taking simple steps to prevent fraud.

Knowing your credit history is important for other reasons as well. If you intend to apply for a loan or credit card in the near future, knowing your credit history could save you a substantial amount of money on interest. By knowing your score you will be able to research what types of loans and credit cards you’ll be eligible for. You won’t have to blindly walk into a bank and be uninformed about your options. Knowing your credit history allows you to make informed, well-researched financial decisions.

Keeping up with your credit history also allows you to prevent costly errors. There are plenty of things that can go wrong when credit bureaus calculate your score. For example, a loan from another person may show up on your credit report and negatively impact your score. Or one of your credit card payments may not have been recorded and could show up as late even though it was paid on time. By regularly checking your credit history you can prevent errors like this and make sure your score stays in good shape.

What type of free credit score will be provided by CreditSoup?

CreditSoup provides the TransUnion VantageScore.

What is TransUnion’s VantageScore?

The TransUnion VantageScore was developed in 2006 by TransUnion, Equifax and Experian. It was developed with consistency between the major credit card bureaus in mind. It pulls information from all three of these companies to calculate the most accurate score possible.

The TransUnion VantageScore calculates your score based off of payment history, credit utilization, total balances across all cards, length of credit history, age of accounts, recent behavior and total credit across all cards.

The score values generated by the TransUnion VantageScore range between 300 and 850. A low score close to 300 means that you have very bad credit, while a high score closer to 850 means that you have very good credit.

What is an Excellent credit score?

The TransUnion VantageScore reporting system considers a score in the range of 750 to 850 to be Excellent. An Excellent score puts you in the top tier of borrowers and allows you to qualify for the best credit card deals and interest rates. It’s much easier to find credit cards or loans with low interest when your score is considered Excellent. You will also be eligible for the best rewards programs on credit cards.

People with Excellent scores are extremely likely to pay their credit card bills on time and have responsible debt management skills, so lenders reward them with the best deals.

What is a Good credit score?

The TransUnion VantageScore reporting system considers a score in the range of 700 to 749 to be Good. A Good score makes you eligible for competitive rates on credit cards. You’ll probably qualify for low interest credit cards, mortgages and other loans. You’ll most likely be eligible for decent rewards programs on your credit cards as well.

What is a Fair credit score?

A score between 650 and 699 is considered to be Fair by the VantageScore rating system. People in this category probably won’t be eligible for the same perks as someone with Good or Excellent credit. It may be more difficult to receive low interest rates or to be approved for credit cards with excellent rewards systems. However there are still plenty of decent options available for people with fair scores.

What is a Bad (Poor) credit score?

By the VantageScore reporting system, a Poor score ranges between 550 and 649. A Poor score can make it difficult to find good interest rates on credit cards and loans. People with Poor scores may need to settle for higher interest rates until they can improve their scores. They may even need to apply for secured credit cards or make large down payments on loans.

What activities can help improve your score?

There are many steps you can take to raise your score. Many of these suggestions are completely free and easy to do.

If you intend to raise your score, making credit card and loan payments on time is imperative. Setting up payment reminders each month before your bill is due is a great way to improve your score. Many people intend to pay their credit card bills on time but forget due to a busy schedule. Setting up a monthly reminder on your phone or computer calendar will make you a lot less likely to miss payments. Even one missed payment can have a negative impact on your score, so it’s very important to remember to pay your bill on time.

You could even take it a step farther and enroll in automatic payments with your credit card. This way, you don’t even have to bother with setting up a monthly reminder. Your credit card payments can be deducted directly from your bank account every month, which is an excellent way to improve your score at a decent rate.

Some readers that don’t currently have credit cards may be looking to raise their score. If you don’t currently have a credit card and are unable to qualify for one due to lack of credit history or poor credit, consider applying for a secured credit card. Secured credit cards are intended for people with poor credit or no credit. They require a security deposit to establish a line of credit. Although they aren’t as convenient as regular credit cards, they can help you improve your score so you’ll be able to qualify for better cards in the future.

How much does payment history impact my score?

Payment history has a large impact on your score. Whether or not you pay your bills on time and in full is extremely important. A good payment history means that you’re a trustworthy borrower and pay your credit card bills and loans back on time. A poor payment history means that you have a bad history of paying your credit cards and loans on time, if at all.

Even one late payment on your credit cards can lower your score up to 110 points. After working hard to build your credit, this can be a huge blow. Therefore, payment history is extremely important and has a strong impact on your score. Missed payments can linger on your credit report for a long time and leave a poor impression on lenders. Late payments should be avoided at all costs.

Conversely, a history of timely payments on your credit cards and loans will raise your score and make you more desirable to lenders. By paying your bills on time and establishing a good payment history you can have a positive impact on your score.

Can disputing errors on a credit report improve credit?

Yes, disputing errors on a credit report can improve your credit. If you notice an error on your credit report, you should contact the credit bureau (Experian, Equifax or TransUnion) that is reporting the error. For example, if one of the credit bureaus reports that you never paid your credit card bill when you did, your score could drop dramatically. If the credit bureau fixes the error, your score will be restored and your credit will no longer suffer.

Errors occur for a number of reasons. A common cause of errors is files getting mixed up. Another example is that the financial information of someone with the same name as you may show up wrongly on your credit report. By contacting the credit card bureau that has reported the inaccurate information, you can get the error removed from your credit report. The three major bureaus allow you to report inaccuracies online or by phone.

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

A score and a credit report are closely related, but not the same thing at all. A score is a three-digit number that represents your credit risk. This number is calculated from information that can be viewed in your credit report.

A credit report is a record of all loans, debts and credit card accounts for an individual. This report contains important information, such as payment history, credit limits and dates accounts were opened or closed.

Lenders use a person’s score and credit report together to determine if they will loan money to potential borrowers.

How long will a missed payment be visible on my credit report?

Late payments can stay on your credit report for up to seven years. However they don’t always appear for this long.

Your score is calculated by an algorithm that takes many factors into account. This algorithm takes into account how long ago the late payment was as well as whether it was a one-time incident. For example, a single late payment from three years ago will not impact your score very much, but two late payments several months apart in the previous year will significantly lower your score.

The impact of a late payment on your score also depends on exactly how late the payment was. A payment that was 30 days late will impact your score less than a payment that was 60 days late. A payment that is 90 days late or more will have an even more negative impact on your score.

Payments that are 30 or 60 days late probably won’t have a long-term negative impact on your score as long as they’re a one-time occurrence. They may lower your score in the short term, but they shouldn’t negatively impact your score for too long. However, payments that are 90 days late or more can have a lasting negative impact on your score. They are much more serious and can lower your score and show up on your credit report for up to 7 years.

How often will my score change?

Your score can change any time new details show up on your credit report. This means that your score can change any time you open a new credit card account, take out a loan or pay a credit card bill.

Generally if you use your credit cards regularly, your score will change once a month. This is because credit card companies and other lenders typically report information to credit bureaus once a month. Your score can change less frequently if you go several months without using any credit cards or making payments on any loans.

Can my spouse’s score impact my score if they have bad credit?

Your spouse’s score will not directly impact your score even if they have bad credit. However, their score can still end up impacting you if you plan on cosigning a loan or opening a shared bank account. Since married couples conduct many financial activities together, your spouse’s score can end up holding you back and disqualifying you from certain loans or special offers.

Who is able to view my credit report? Is this information confidential?

The Fair Credit Reporting Act (FCRA) sets guidelines about who can access your credit report. Financial institutions such as banks and credit card companies can view your credit report regularly if they wish. If an institution views your credit report it must be for financial reasons, such as evaluating whether or not you qualify for a loan or to determine your interest rate.

In some cases a person will need your written permission to view your credit report. However there are situations where no permission is needed, such as when a court order is issued. This means that an employer could not view your credit report without your written permission, but the court system could access this information without checking with you first.

How often should I check my credit report?

It’s a good idea to check your credit report at least once a month to monitor for fraud. Identity theft is prevalent in the modern age, and by checking your credit report monthly you can take steps towards preventing it. It’s also a good idea to carefully check all changes to your credit report to make sure that no errors were made.

Additionally, checking your credit report regularly allows you to see changes in your score. By carefully monitoring your score you may become aware of new opportunities for lower interest rates. If you see your score steadily increasing, consider applying for better credit cards and seeing if you can lower your interest rate.

How can I help my family member raise their score or establish credit?

You may want to help a child or spouse raise their score or establish credit. A great way to do this is to add them to your credit card account as an authorized user. This allows them to build up their score while using an already established account. It provides an excellent opportunity to increase their score and qualify for their own credit card in the future. Always make sure to discuss the importance of using your credit card responsibly.